Hong Kong’s biggest developer sells homes at discount after rate cut
SUN Hung Kai Properties, Hong Kong’s biggest property developer, is marketing a new project at a 20 per cent discount to lure buyers after a recent interest-rate reduction.
The company’s Cullinan Sky project in the former airport Kai Tak area was priced at HK$19,668 (S$3,261) per square foot on average for its first batch, it said. That is about 20 per cent lower than the stock in new projects nearby, according to Midland Realty.
Despite Hong Kong banks’ rate cut last week, the property market still faces obstacles including an excess inventory of homes and a weak economy. Ample new supply – with the unsold backlog standing at a 20-year high – will limit any significant rebound in the residential market, according to Bloomberg Intelligence.
Sun Hung Kai is confident in its sales prospects given the start of the rate-reduction cycle and rising residential rents, Victor Lui, deputy managing director, said on Monday (Sep 23). The developer will actively plan new project launches in the next few weeks, he added.
In an early sign that homebuyers are not seizing on the drop in interest rates, the city recorded the fewest weekend sales in two months as demand remained weak from mainland Chinese buyers and investors.
Most major banks in Hong Kong including HSBC Holdings lowered lending rates after the Hong Kong Monetary Authority reduced its base rate by half a percentage point, keeping in step with the US Federal Reserve last week.
The effective mortgage rate is now at 3.875 per cent after the cut, down from 4.125 per cent previously, according to mReferral Mortgage Brokerage Services. BLOOMBERG
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