Some major developers are holding back the sales of luxury apartments of their residential projects in Hong Kong because the tense political situation and escalating violent protests have dented buyers’ mood and depressed prices.
CK Asset Holdings, the developer founded by billionaire Li Ka-shing, was the latest developer to have postponed the planned sale of condominiums in one of its projects, citing adverse market conditions. A spokeswoman of CK Asset Holdings told Bloomberg on Wednesday that the homes at 21 Borrett Road at Mid-Levels would not be offered for sale as scheduled this month.
This time around, Hong Kong’s sky-high property prices could be put at risk by the escalating protests. Sentiment has already been dented by the sluggish economy and the (Sino-US) trade war. There are anecdotal reports that property viewings have declined significantly in recent weeks.
Qian Wan and Tom Orlik,
economist at Bloomberg Economics
These apartments are estimated to cost at least HK$100 million ($12.7 million) each. If sold at that price, the 115 units in the first phase of the development, scheduled for completion in September, could generate income of HK$11.5 billion. There are 66 units in the second phase of the project.
CK Asset Holdings Executive Director Justin Chiu Kwok-hung earlier told local media that “marketing a luxury project would be difficult under the current social atmosphere and there is no fixed schedule for the sale.”
Another blue-chip developer Sun Hung Kai Properties, was reported to have postponed the sale of the “Central Park” project in Mid-Levels East and another project in the Kowloon district as buyers’ sentiment was seen to be worsening amid nagging social unrest.
The consortium formed by CSI Properties, Asia Standard International Group and Grosvenor have also delayed the release of detail of the launch date and selling prices of its luxurious residential project “Dukes Place” at Jardine’s Lookout.
“This time around, Hong Kong’s sky-high property prices could be put at risk by the escalating protests. Sentiment has already been dented by the sluggish economy and the (Sino-US) trade war. There are anecdotal reports that property viewings have declined significantly in recent weeks,” said Qian Wan and Tom Orlik, economist at Bloomberg Economics.
Jonas Kan Kwok-yu, head of HK/China property research at Daiwa Capital Markets, agreed: “We expect a cautious wait-and-watch attitude to prevail in the coming months and the tender results for the Kai Tak site indicate developers are likely to be more cautious about re-investment in the foreseeable future.”
The lower segments of the residential and commercial property market are also subdued by the frequent political protests.
Residential properties in Kingswood Villas have first felt the chill due to changes in market sentiment, as owners have to cut prices or even take a loss to unload their holdings for fear that the market will fall further.
In the commercial property sector, some owners have to slash their asking prices by up to 40 percent to make a sale.
HONG KONG NEWS