Hong Kong developers test homebuyer sentiment as residential market outlook improves
Henderson Land and Swire Properties have varying success with the sales of their residential projects in To Kwa Wan and Chai Wan
Two major residential developments in Hong Kong saw tepid sales over the weekend despite a slow recovery in the city’s property market, showing that buyer sentiment has yet to fully rebound even as developers strive for higher profit margins amid a stabilisation in home prices, according to analysts.
“Developers are now testing the waters” by pricing new projects at market rates, aligning with average prices in nearby developments or slightly higher, said Joseph Tsang, chairman of JLL Hong Kong. “But it seems like the market is still expecting more discounts, as sentiment has yet to recover, which is reflected in the sales performance.”
In the first round of sales on Sunday, Henderson Land Development said it sold 75 of the 148 units at its To Kwa Wan Road redevelopment project, Highwood Phase I. The units were priced at an average of HK$18,179 (US$2,336) per square foot, exceeding the HK$17,968 per square foot for the first 30 units released in 2023 at the nearby The Uptown project developed by Yu Tai Hing.
Swire Properties sold 2 of the 120 units at The Headland Residences in Chai Wan in the second round of sales on Saturday. During the first round on the previous weekend, less than half of the units were sold. The developer released its first price list in late August, averaging HK$17,565 per square foot – about 10 to 20 per cent higher than secondary transactions in nearby housing estates.
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“Developers are adopting more aggressive pricing strategies, as there is no incentive to lower prices given that lived-in home prices are stabilising,” said Will Chu, an independent property analyst, noting that the primary market typically referenced prices in the secondary market.