Kai Tak flat prices cut 38pc as battle for buyers looms

Themis Qi

A group of developers yesterday slashed prices for some flats at Kai Tak by nearly 40 percent in a bid to be the first to cash in on an expected sales boom once interest rates start to fall this month.

Kicking off the price war, K Wah International together with Wheelock Properties and China Overseas Land & Investment said the 50 flats at KT Marina I would be sold at an astonishing discount of 38.5 percent, up from 22 percent previously.

After the huge discount, the cheapest flat among the 50 units will cost just HK$4.61 million, 21 percent cheaper than the price before the adjustment. The 50 flats include 16 one-bedroom and 34 two-bedroom units.

The average price for the 50 units after discounts stands at HK$17,384 per square foot.

That is 12 percent lower than the first price list of 208 flats, when the project was launched in October last year.

Apart from the select 50 flats, buyers can enjoy discounts of up to 25 percent for other units in the project.

K Wah International's director of sales and marketing (Hong Kong properties) Tony Wan Wai-ming said the developer hopes the cheaper prices will help the primary market's "boom," even though the higher discounts come at the expense of its profits.

The offering comes with the US Federal Reserve expected to start cutting interest rates this month, which Wan believes will have a positive impact on the market.

UBS forecasts transaction volumes will be boosted in the short run and the rate cuts will stem the decline in home prices.

Second-hand homes sales at the city's 10 blue-chip estates have also rallied over the past two weeks on the hope of the rate cuts.

But the Swiss bank warns that inventory of new homes remains high and this will keep threatening home prices, which could fall by as much as 5 percent this year.

KT Marina, which offers 1,017 flats in the first phase, has sold only about 90 flats since its launch in October last year.

The competition in Kai Tak's old airport runway area is fierce with over 7,300 new homes expected to be put up for sale this year.

Across Hong Kong, the supply is estimated to be about 109,000 units in the coming three to four years.

China Overseas uploaded the sale brochure for its Twin Victoria in Kai Tak yesterday, getting ready to kick off sales shortly.

Knight Frank sees a low possibility of a rebound for home prices this year, as it remains unknown whether local banks will follow the US lead and cut interest rates.

The property market is experiencing a rocky recovery amid high interest rates and economic uncertainties. After removing housing curbs in February, prices climbed for two months but then retreated for three consecutive months and hit a new low for nearly eight years in July. For the first seven months of the year, private home prices fell 4.6 percent.

With home sales losing momentum, some developers have turned their projects into rentals as rents remain high.

themis.qi@singtaonewscorp.com