The real-estate isn’t any fancy condominium, let alone landed property worth millions. But it’s Hong Kong, the land where its real estate assets are more expensive than gold. With odds at more than 300 to 1, it didn’t stop some 1,300 home seekers from trying their luck. A long line of potential buyers started to form at 9am on Tuesday outside the sales office in Nina Tower.

 

They were there to chase after 4 flats in Parc City, Tsuen Wan – ranging in size from 427 to 850 square feet. And according to estate agents, about 1,000 of them were after just one small unit. That’s an odds of 1,000 to 1 for one small unit of 2-bedroom flat – selling at a whopping HK$6 million (US$766,766; £588,362; RM3.256 million).

 

Sammy Po Siu-min, chief executive at Midland Realty’s residential department, said – “It shows the market is really hot. About 80% of these people are chasing after one small two-bedroom unit that costs HK$6 million. Most of them were just trying their luck. It’s like hitting a jackpot in Mark Six (Hong Kong’s popular lottery).”

Apparently, the four flats were sold for the first time around August 25 but the transactions did not proceed to completion. Therefore, Chinachem offered the four units for resale after their original buyers, supposedly to pay between HK$6 million and HK$14.4 million each, walked away. So when one of the original buyers chickened out of one of the smallest unit, it attracted the 1,000 home seekers.

 

The smallest unit of flats which was initially purchased for HK$6.04 million measured only 427 square feet. The original buyer had his HK$300,000 deposit forfeited and the unit on the 15th floor of Tower 8 was put on resale – at the original price. Buyers who could pay the property in cash were given a small discount – selling at HK$5.89 million.

 

But the smallest unit was also the most sought after, forcing the developer to put the 1,000 bidders into a raffle to decide who would become the lucky resident of the real estate. Chinachem said the draw to decide the new owners was done by early on Tuesday afternoon.

The biggest of the four abandoned transactions was the HK$14.4 million purchase of an apartment on the 45th floor at Tower 5. The original buyer was forfeited of HK$720,000 down payment. However, according to Sammy Po, only a few of the people in the queue were there for the units costing over HK$14 million, considered higher end of the scale.

 

Nearly a thousand prospective buyers formed long queues at Nina Tower in Tsuen Wan before even Chinachem Group could kick off the sale of its Parc City project at 9am on August 25. There were 22,500 would-be purchasers registered to buy the first batch of the 521 units, the largest number of subscribers for a new project since 1997.

 

The crowd was attracted to Chinachem Group’s lower-than-expected launch price, a tactic to lure potential away from secondary market. They launched the first batch of units at Parc City at HK$14,449 per square feet – after a discount of 20% – and about 14% lower than the first batch offered by nearby rival Superman Li Ka-shing’s CK Property’s Ocean Supreme.

Chinachem proudly announced it had sold all 953 units, worth HK$9 billion (US$1.15 billion; £882.7 million; RM4.88 billion), at Parc City in just 9 days, making it the most sought after new project since 2013. But Parc City, scheduled to be completed in 2019, was able to sell well partly due to the larger mortgage loan offered by the developer.

 

Buyers of Parc City property were only required to fork out 20% of the flat’s value instead of 40% to 50% for homes in the secondary market. After Parc City discounts, sales of previously-owned home in the city were reportedly tumbled between 15% and 40%. Obviously, the new property launches has cannibalized the secondary market.

 

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September 6th, 2017 by financetwitter

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