Protest against controversial extradition bill casts shadow on HK’s largest property sales since early May

18-Jun-2019 Intellasia | South China Morning Post | 10:16 AM Print This Post

Property sales were disappointing on Sunday in Hong Kong’s biggest offering since early May, as buyers stayed away amid huge protests in the city against a proposed extradition bill, and ongoing concerns over the US-China trade war.

Not only is Hong Kong sitting in the middle of a worsening US-China trade war, but also its own political turmoil as protesters took to the streets on Sunday for a third time in a week against a proposed extradition law that would allow suspects to be sent to mainland China. They are demanding that Chief Executive Carrie Lam withdraw the bill and resign.

Only 30 out of 251 flats at Grand Le Pont in Tuen Mun, the New Territories, were sold by around 6pm, according to Sammy Po, chief executive at Midland Realty’s residential department.

The flats were put up on sale by Vanke Property, the Hong Kong unit of China’s most valuable developer. Of the 251 units, 162 units were on open sale and 89 for tender.

Tycoon Lee Shau-kee’s Henderson Land fared far worse. All 33 flats at Novum East in Quarry Bay went unsold as of 6pm, while only one of 13 was sold at Novum West in Sai Wan.

Prices at Grand Le Pont started from HK$4.66 million (US$595,000) for a 353-square foot unit to HK$9.3 million for a 738 sq ft flat after discounts, according to a statement from the Shenzhen-based developer.

Vanke said late on Sunday that it had sold 11 one-bedroom, 16 two-bedroom and three three-bedroom units. The one and two bedroom flats were priced around or under HK$6 million, while the three-bedroom flat sold for HK$10.69 million.

The Grand Le Pont is part of the Le Pont Shangyuan project, which was launched in late 2018. Vanke said it has sold 80 per cent or 903 of its 1,124 units as of Sunday, cashing in nearly 5.7 billion yuan (US$823 million).

The sale was the biggest since 1,148 flats were offered by three developers in May and served as a test of buyers’ appetite for big purchases, in a city where real estate is a confident measure of residents’ mood.

“[Sales] will be affected by the protests, there are a lot of people on the street at the moment,” said Vincent Cheung, managing director of Vincorn Consulting and Appraisal. “If you were an owner you would not put your property on the market.”

Hong Kong’s protests, combined with the escalating US-China trade war, will see the current poor sentiment continue for the next three to six months, Cheung said.

Sentiment has been downbeat in Hong Kong since early May, when progress of talks between US President Donald Trump and Chinese President Xi Jinping cooled. The US raised tariffs to 25 per cent on $200 billion worth of Chinese products, and has threatened to raise duties on another $300 billion of imports.

Economists said that the passage of the bill could affect the business environment in the city. Already property developers have started reacting to the protests.

On Tuesday, Hong Kong-listed developer Goldin Financial Holdings walked away from a HK$11.1 billion (US$1.42 billion) winning bid for a plot of commercial land on the city’s former airport runway, forfeiting a HK$25 million deposit over what it called “social contradiction and economic instability” in the city.

Sun Hung Kai Properties (SHKP) and Wheelock Properties both called off press conferences last week about sales of projects. SHKP has not made any announcement regarding the sale of its Mount Regency project in Tuen Mun in the coming week, while Wheelock said it would be taking a wait-and-see approach to the sale of flats at its Montara project in Lohas Park, scheduled for the end of this month.


Category: Hong Kong

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