Hong Kong home price war could get uglier after CK Asset's new home launch, agents say

CK Asset Holdings

04/08/2023 10:03

HONG KONG, Aug 4 (Reuters) - A new home launch this week
by Hong Kong property developer CK Asset  1113.HK  at the lowest
prices in seven years has shocked the market and could intensify
a price war in the financial hub, realtors said.
    Home prices in one of the world's most expensive property
markets have retreated again since May after a short-lived
bounce early this year from a 15% decline in 2022. Potential
homebuyers were deterred by rising interest rates and the weak
economic outlook.
    CK Asset, owned by tycoon Li Ka-shing, said on Thursday it
would sell the first 132 units of Coast Line II, a development
in eastern Kowloon, at prices between HK$13,443 to HK$16,407 
($1,721-$2,101) per square foot after discounts. 
    The prices are around 20% below market rates in the area,
and the lowest unit price in the launch - HK$2.9 million for a
210 square-feet studio apartment - is the cheapest in Hong Kong
since 2019, property agents said.
    "All the other developers are under pressure," said Louis
Chan, Asia Pacific vice chairman of Centaline Property Agency.
"It will intensify a price war that has already started."
    Chan said two new developments have suspended sales in July,
sending a very negative signal to the market that there was a
lack of demand. He expected developers would be more cautious in
starting new sales in the second half.
    In an earnings conference on Thursday, CK Asset chairman
Victor Li told analysts that Coast Line is selling at floor
prices last seen seven years ago and the company "likes to sell
at market price or lower to generate turnover". 
    "If a person wants to buy a home for his or her own use, and
can afford it, I think now is actually a better time than 3
years ago," Li said, citing a lower risk when the market is
bleak and interest rates are high because the likelihood of
rates dropping is higher than rising. 
    "It's always safer to employ a counter-cyclical approach
when it comes to investing, whether a person is to buy his home
or us buy land," said Li. 


($1 = 7.8086 Hong Kong dollars)

 (Reporting by Clare Jim; Editing by Kim Coghill)
 ((clare.jim@thomsonreuters.com;))