Hong Kong Wen Wei Po (By Leong Yuet Kam)
Competition among new projects arises on the eve of the National Day. Just when occupied project Cullinan West III on top of Nam Cheong Station developed by SHKP and MTR put on sale its first round of 352 units today, Upper River Bank in Kai Tak, the first project developed by mainland company Longfor Properties and KWG Property in Hong Kong with a pre-sale term of about two years, announced its first price list yesterday, including 138 units in layouts of one-bedroom to three-bedroom and at discounted average usable area sq ft price of HKD24,310, the highest sq ft price for first batch in Kai Tak throughout history, while it is 15% lower than the current first-hand property price in the same district. The cheapest unit is an one-bedroom unit in 322 sq ft, and its discounted usable area price is HKD7.288 million.
As for SHKP putting on sale Cullinan West III on top of Nam Cheong Station at price of previous level while the sq ft price of Upper River Bank’s first batch is 20% higher than the discounted average sq ft price of the first batch of OASIS KAI TAK which is the last new project of the same district in two years ago, the Marketing Director (Hong Kong and overseas) of KWG Property, Cheong SzeWan expresses the group calculated the cost based on land prices, construction and reasonable profits, and describes the price is surprising and attractive, as a gift of greeting from the two groups. He also points out that, there has been a long time for the Kai Tak area to have new project, so it is believed it is competitive and that every real estate in every district has its customers.
Longfor Properties: There will be mark up for additionally launch.
Hong Kong Project Marketing Director of Longfor Properties, Woo SuiHung believes, land supply in Hong Kong is still lack, and it is believed there is still upside potential in Hong Kong property market, so current is a good time to put on sale this project, with the sale prices referring to the transaction sq ft prices of the first-hand and the second-hand properties in the same district, also the additionally launch which may have mark up will depend on application situation. This project opened the sample flat to public yesterday, and the application will begin in a couple of days, also the sale will start next week at the soonest.
138 units in Upper River Bank’s first price list are all located in block 2, including 28 one-bedroom units, 82 two-bedroom unit and 28 three-bedroom units, in 332-752 sq ft, and the prices are HKD8.888-23.411 million with the sq ft prices at HKD26,083-32,336, leading the market value to more than HKD2.1 billion, also there is a maximum discount of 18%. Besides, in addition to the 180-day payment method, the developer also offers a 300-day payment plan, a 10% down payment easy construction periodic payment plan, and a 5% down payment super construction periodic payment plan.
Looking up the information, the site of current Upper River Bank (No. 1 of District 1K, Kai Tak) was won by Longfor Properties and KWG Property in May 2017 for HKD7.23 billion, and it can be built with about 575, 508 sq ft, with the floor area sq ft price at HKD12,563, which was the lower limit of the market estimate at that time. In other words, the sq ft price needs to be at least HKD24,000, calculating the construction cost and 20% profit. At the same time, there will be over two years before the occupation, so the pricing of the project can be relatively aggressive being affected by the vacant tax on the first-hand property that will be enacted.
Agents estimate it may attract investors.
The APAC Vice President and Residential Department President of Centaline Property, Chen WingKit expresses, the prices in Upper River Bank’s first price list are 15% lower than the sq ft price of HKD28,000-30,000 for stock units of current new project in the same district, plus it supplies small size units and has the advantage of the East Kowloon urban area, also the developer offers fixed price concessions for three buyers of two-bedroom units, so it is believed buyers will be attracted. He also believes that the proportion of investors in Kai Tak before was about 40%, and it is expected this project and Cullinan West III may overlap on investors.
He also points out that, the relaxation of Sino-US trade war is beneficial to the property market, with about over 300 first-hand transactions were made since September, plus there would be five new projects being launched this month, and if the sale of Cullinan West III today is ideal, then it means medium cost property market will be booming, which also would have a win-win situation for each project, besides it is expected that about 1,500 first-hand property transactions will be recorded in one month.
The Chief Executive of the Midland Real Estate Residential Department, Po Siuming expresses, the pricing of Upper River Bank’s first batch is more competitive, since the sq ft prices of stock properties in new project of the same district are HKD28,000 to over HKD30,000, plus the second-hand property sq ft prices for building over ten years near The Latitude also is nearly HKD24,000, and it is estimated many investors would be attracted, perhaps accounting for 30% to 40%.
He expresses, this month's new sales continue to lead the market, and it is expected that the first-hand property market would record about 2,300 transactions, also the second-hand property prices falling will speed up and the trading will be significantly accelerated.
Cullinan West III has an over-subscription of 14.4 time on application.
On the other side, the application for the first batch of 352 units of Cullinan West III on top of Nam Cheong Station developed by SHKP and MTR closed yesterday, and source points out that it had collected 5,419 applications, an over-subscription of 14.4 times. The batch of units will be put on sale today.