Developers in Hong Kong are pressing ahead with sales at several luxury residential projects despite concerns that the high-end market is softening.
The developments—Mount Nicholson, Twelve Peaks, Whitesands and Redhill Peninsula—have launched or are expected to actively launch this quarter, said David Ji, director and head of research and consultancy of Greater China at Knight Frank.
Redhill Peninsula, Twelve Peaks and Whitesands have put units on the market, while Mount Nicholson is expected to launch before the year’s end.
The properties are in various high-end areas—South Lantau Island, the luxury residential districts of the Peak, and south side of Hong Kong Island.
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Prices for the remaining eight Twelve Peaks houses range from 393.4 million to 819.1 million Hong Kong dollars. Houses at the Redhill Peninsula are priced between 94 million and 125 million Hong Kong dollars. Swire Properties set the guiding price for the smallest property at Whitesands at 48.5 million Hong Kong dollars.
The Mount Nicholson project has yet to release its price list.
The results of the bidding process for Whitesands will be announced Nov. 3, according to Swire.
The launches this fall come as the market is keeping an eye on whether the U.S. Federal Reserve raises interest rates this year. U.S. monetary policy impacts Hong Kong since the local currency is pegged to the U.S. dollar.
But a minor interest-rate hike by the Federal Reserve is unlikely to have a big impact on luxury home prices in Hong Kong, said Ji.
Investors are watching the market cautiously after banks said Hong Kong’s property market could see prices drop. J.P. Morgan forecast a drop of 5% to 10% over the next three years; UBS said it could be 25% to 30% by the end of 2017.
For now, the luxury residential market is holding steady in Hong Kong, analysts say.
“We don’t see any significant rise in buyers stepping away from transactions before completion,” said Denis Ma, head of research for Hong Kong at Jones Lang LaSalle. “Demand is likely to remain soft while prices continue to trend sideways.”
Prices may retreat slightly if developers try to stimulate sales, but a sharp correction is unlikely barring a major economic event, he said.
Making local headlines, on Oct. 13, an undisclosed buyer terminated an 88 million Hong Kong dollar (US$11.3 million) deal on an apartment at 39 Conduit Road, one of the most expensive properties in the city, according to the government’s website of the Sales of First-hand Residential Properties. The property was subsequently bought by another buyer on Oct. 20. The developer did not respond to a request for comment.
Separately, Sino Group, the developer for luxury residential property Cluny Park, said no deals were made after an official bid period for apartments in the complex closed Oct. 8. Cluny Park was watched by investors as a test of the market as it is the first high-end luxury property to launch sales after predictions of an overall market price drop.
A representative of Cluny Park would not comment on the results, but said they would launch another tender at a to-be-decided date.
“With prices at record-high levels, more supply on its way, an uncertain economic outlook and higher interest rates on their way, it’s not surprising that a lot of buyers are taking a wait-and-see attitude towards buying,” said Ma.
Ma said it was not uncommon for developers to reject bids, and that sale by tender was not a common way of handling sales.
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This article has been updated.
Correction: Denis Ma is head of research for Hong Kong at Jones Lang LaSalle. A prior version of this article had an incomplete description of his title. (Dec. 2, 2015)