Great Eagle launches project for the first time in the 30 years, with prices less 20% than the second hand property prices in the same district.
Hong Kong Wen Wei Po (By Leong Yuet Kam)
In the first half of the year, property prices in Hong Kong had risen by nearly 10%, but developers are restrained on pricing due to the Hong Kong political and economic atmosphere in recent months. Great Eagle Holdings which launched new project in Hong Kong again after 30 years announced the first price list of ONTOLO in Pak Shek Kok, Tai Po yesterday, including 150 units at average sq ft price of HKD17,173, and the discounted average sq ft price is HKD13,567 deducting the highest 21% discount, about 15-20% lower than the second hand property prices in the same district, also the lowest discounted sq ft price is HKD11,446, the lowest among new projects in Pak Shek Kok in the recent one year, besides the lowest discounted sale price for one-bedroom flat in 396 sq ft is HKD5.536 million.
The Executive Director of Great Eagle, Law ChunHim describes the prices of the first price list of ONTOLO as “Excellent Start Prices”, which are restrained and referred to new projects in the same district, so they are believed to be attractive, and it supplies one to three bedroom, with about 70% among are two-bedroom units, also there are 34 units under HKD6 million after discounts. He expresses, the sample flat in Langham Place, Mong Kok will be open to the public today, and the application will start simultaneously, while the additional launch arrangement will depend on the application, also there will be mark up for the additional launched units, besides the sale will start possibly within this month.
The first batch of 150 units mostly view the building scene.
Asked whether this restraint pricing was affected by the recent poor political and economic atmosphere in Hong Kong, he said frankly that the major environmental factors have caused market fluctuations, while Hong Kong property market is still dominated by demand and insufficient supply, so it will develop steadily in the long run. He also pointed out that, the project is the last new project in the same district, with superior geographical environment and materials, plus the first hand property sales in the district is good, so they have confidence of the sales.
According to the price list, this batch of 150 units are distributed in blocks 6A, 6B and 7A, 7B, with usable areas in 389-1,231 sq ft, and they are in the layout of one to three bedroom at prices of HKD7.007-25.247 million, also the discounted prices are HKD5.536-19.945 million with the discounted sq ft prices at HKD11,446-16,202 deducting the highest discount of 21%. The lowest discounted price for 260 sq ft one-bedroom flat is HKD5.536 million, for 781 sq ft two-bedroom flat is HKD8.939 million, and for 1,027 sq ft three-bedroom is HKD14.489 million. These 150 units mainly view the building scene in the back row, only 10 units of three-bedroom among in areas of 1,027 to 1,231 sq ft can lookout the sea, and buyers of these three-bedroom units can subscribe for one parking space.
In addition, developer provides the first mortgage in 70-80%, with the loan period up to 25 years of the longest, and the interest rate for the first 24 months is P-2% (P is 5.375%), and then P+2.125% to P+. 2.615%; also the second mortgage up to 30%, and the first mortgage plus with the second mortgage can be up to 80% at the highest.
"Cost price" is only HKD3300, so the profit is over 30%.
According to the data, Great Eagle won the land of this project for HKD2.412 billion in May 2014, the buildable floor area of which was about 730,000 sq ft, leading the floor area sq ft land price at about HKD3,300, the lowest floor area sq ft land price of Government residential land site in the district. Deducting the cost of construction and other costs, the profit of ONTOLO is at least 30% bases on the discounted average sq ft price of the first batch.
The President of Asian Pacific Region Residential Department of Centaline Property, Chen WingKit expresses, ONTOLO has rare one-bedroom houses and new flats around HKD5,000, and the unit prices are about 15-20% lower than the second hand property prices in same district, so it is estimated some one-bedroom flats will attract new HOS customers, also it is believed the first batch of 150 units will have the opportunity to be sold out, besides the market is believed to accept restrained mark up in additional launch.
Yu Yongtai, Senior Regional Business Director of the Midland, Yu WingTai points out that, ONTOLO providing restrained prices is estimated to have positive effect on the market, and the rent of return may up to about 3.5% base on the sq ft rent in the district at about HKD40-50, so it is estimated there will be buyers who interested in quality houses being attracted.