Hong Kong property: all eyes are on CK Asset’s Blue Coast project for ‘direction’ on housing prices

Hong Kong property: all eyes are on CK Asset’s Blue Coast project for ‘direction’ on housing prices

Hong Kong property: all eyes are on CK Asset’s Blue Coast project for ‘direction’ on housing prices

Last year, CK Asset surprised the market by launching its cheapest new homes in seven years. It sold all 655 units at its Coast Line II project in Yau Tong. The project was ranked second among the top-20 major new developments sold in 2023, according to Dataelements, a data provider that tracks new residential properties in Hong Kong.

One of the biggest residential launches of 2024, Blue Coast will have two phases totalling 1,200 units. It is being developed as part of phase three of Southside in collaboration with transit operator and developer MTR Corp, and is likely to be launched this month, CK Asset said on Monday.

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CK Asset has neither released its price list, nor indicated if the project will be sold at a low price or even at a loss. Justin Chiu Kwok-hung, CK Asset’s executive director, said last month that the cost of the project was HK$28,000 (US$3,578) per square foot, and that it might increase if interest rates rise further.

“The pricing of the first batch of units is likely to be close to the cost, in order to attract people to the market,” said Will Chu, senior research analyst of Hong Kong and China property at CGS International Securities. Although the developer will only generate a single-digit profit margin, it will signal to the market that it thinks Hong Kong’s home prices are stable and that CK Asset is not rushing to sell units, he added.

If the asking price is lower than cost and close to the average prices of nearby developments, at around HK$25,000 to 26,000, “the developer would rather achieve a higher sell-through rate by clearing its stock at a lower price, as it has the best location among neighbouring projects”, Chu added.

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Of the 642 units to be launched, more than 80 per cent are bigger than 700 sq ft. CK Asset, which set off a trend of sub-200 sq ft micro flats in 2014 with its Mont Vert project, is now eschewing shoebox units. There are no studios, one-bedroom flats or anything smaller than 450 sq ft in Blue Coast.

“The room types and designs are targeted at families whose children are going to international schools nearby,” Chu said. The Canadian International School and Singapore International School (Hong Kong) are located in Wong Chuk Hang.

Blue Coast’s pricing will have an impact on medium to high price properties, or those priced HK$10 million or above, he added.

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About 116 units in the project’s 1A phase will be put up for tender, with room types ranging from three to four-bedroom flats with sea views and balconies, the developer said. A reasonable market price will be about HK$40,000 per square foot, or HK$50 million for a unit, it added.

There has been a sharp rise in property transactions in Hong Kong, as the market continues to benefit from the recent removal of property curbs. More than 1,660 first-hand transactions have been recorded in the first 10 days of March, representing a 25 times increase over the 64 deals seen in the same period last month, according to Midland Realty.

A buyer bought all 24 units put up for sale at Henderson Land Development’s Belgravia Place project in Shek Kip Mei on Monday, according to local media, for more than HK$166 million in the largest transaction since the removal of the property curbs.

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Midland has revised upwards its forecast for first-hand transactions this month to 3,500, an increase of about 12 times from the 270 deals recorded in February. The prediction, if realised, will be the new high since the implementation of the Residential Properties (First-hand Sales) Ordinance in 2013, said Sammy Po Siu-ming, CEO of Midland’s residential division for Hong Kong and Macau.

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