The first property sale in Hong Kong in over two months did not generate as much hype as initially expected. The massive sale launched by China Evergrande, which features larger-than-usual discounts for previously highly sought after flats failed to attract big-ticket purchases.
Industry experts have pointed out that home buyers are likely still reluctant in making major commitments given the slumping economy and the uncertainties brought about by the ongoing viral epidemic. China Evergrande offering massive discounts for prime units in the second phase of its Emerald Bay project in Tuen Mun.
Out of the 141 flats that were offered to buyers at large discounts, the real estate developer only sold 49 units. This was despite the massive HK$20,000 per square foot discount offered for each unit. According to sales agents, the units were offered at an average of about 14 percent discount from the original price.
Centaline Property Agency chief executive of the residential division, Louis Chan, pointed out that the epidemic has everyone worried, which is why China Evergrande's discount is not generating the expected hype.
Chan clarified that the discount itself doesn't make the units exceptionally cheap. A 461-square foot flat for example, which originally is listed at HK$9.41 million, would still cost around HK$8.07 million. Although, China Evergrande is offering smaller units that are relatively more affordable, most of which are priced between HK$4 million and HK$5 million.
China Evergrande's Emerald Bay project is comprised of 1,982 apartment units and 22 villas. It is the company's maiden project in Hong Kong and part of its efforts to expand outside of mainland China. The launch of the project included a massive sale of around 167 units in October, with the units all, sold out on the first day. Subsequent sales campaigns were unfortunately lackluster, even with massive discounts. The company saw a decline in interest in its flats at the start of the month following the spread of the viral epidemic in the mainland.
Some developers have pointed out that selling over 36 percent of the units on offer in its latest sales campaign is still a decent haul given the current circumstances. The reception of the city's first major property launch in over two months has been seen as a clear sign that a correction in the market may be underway.
Hong Kong's economy is still technically in a recession and the slump in the world's most expensive residential property market is still ongoing. However, developers expect the market to correct itself in the short-term.