Hong Kong Real Estate Sales is Rebounding

Hong Kong Real Estate Sales is Rebounding

Local property transactions is regaining the drive over the weekend in the midst of anticipation of developers delivering further new flats on the market. 70 out of 170 mainland real estate companies which are listed on Hong Kong’s stock market have been proved to be making profit while the rest are under pressure with limited capital. Many of the middle and small sized companies, particularly those which didn’t get the opportunity to build government subsidized housing, are now facing highchallenges in maintaining profit margins. Manager Ding Lei says his company, Zhangjiang Real Estate, is one among them. “Our company is transforming from a 100 percent real estate company to one which will also become involved in high-tech and risk investment areas.” As per the market report from Wande Statistics Company, many real estate developers have changed to investing in the mining industry. Since late last year, more than 20 listed companies have made investments into this area, accounting for one sixth of the total real estate sector listed on the stock market. According to Midland Realty, transactions among the 10 benchmark residential projects incresed to 33 during the weekend, from 28 a week back. None of the 10 reported zero transactions, and the opportunity for bargaining has also reduced.

“Some developers are planning to introduce more new flats soon,” Midland chief analyst Buggle Lau Ka-fai said. “The market generally expects aggressive pricing on the new flats as secondary market sentiment has also picked up.” The situation is more evident in Tseung Kwan O, where several major developers are scheduling sales launches. Cheung Kong (0001) last week said the 961 square foot, three-bedroom units of La Splendeur at Lohas Park will expected be priced from HK$6,800 per sq ft. But owners of flats at earlier phases of Lohas Park are offering lower prices, according to Centaline Property. The owner of a three-bedroom 961 sq ft flat at Le Prime, in the second phase, is asking HK$4,683 psf – 31 percent lower than those at La Splendeur.

Sun Hung Kai Properties also plans to start sales at The Wings, a new project atop the Tseung Kwan O MTR station. Pricing has yet to be revealed. Midland’s Lau said homeowners in the neighborhood allow only 2-3 percent room for bargaining – down from a 5 percent leeway a few weeks ago. Sentiment is also rising on Hong Kong Island, with a minimum of three residential projects set to be opened – The Altitude and Winfield in Happy Valley and Argenta at Mid-Levels.