Sun Hung Kai Properties Offers 5% Price Guarantee on Flats Amid Falling Market

Sun Hung Kai Properties (0016) has taken a bold step to address the current weak market sentiment and high-interest rate environment in Hong Kong. As the first developer to do so, the company is now offering buyers a 5 percent price guarantee on its flats, should the prices fall by 10 percent or more within the next seven months.

In an effort to sell its unsold flats, SHKP released a new price list for 93 units at Novo Land 2A in Tuen Mun. The company promised to refund up to 5 per cent of the deal price for the batch if, between now and May 2024, the average monthly home price index drops below the figure recorded at the time of purchase. 

To illustrate this guarantee, let's consider the example of the cheapest unit in the price list, which was purchased for HK$3.35 million after discounts. If the home price index falls by 10 percent during the specified period, Sun Hung Kai Properties will refund HK$167,700 to the buyer. However, it is worth noting that this refund does not fully cover the paper loss of HK$335,000.

Under this new scheme, if home prices do fall, Sun Hung Kai Properties will bear a maximum cost of HK$28.95 million. The total value of the 93 flats in this batch, after discounts, amounts to HK$579 million.

Buyers can apply for this guarantee once per property and have to submit a written application by the end of October next year. 

Victor Lui Ting, deputy managing director of Sun Hung Kai Properties, believes that this scheme, linked to home prices, will boost buyer confidence. He added that transaction volume in the coming year will surpass that of this year. 

The new price list reveals an average price of HK$13,288 per square foot after discounts, which is approximately 7 percent cheaper than the price list disclosed in June. The 93 units consist of three studios, ten one-bedroom units, 52 two-bedroom units, and 28 three-bedroom units. Price range between HK$3.35 million and HK$8.93 million after discounts. 

Subscription registrations will start on Saturday, and sales may commence as early as next week. 

In other news, Emperor International (0163) launched a new batch of 30 units at SouthSky in Aberdeen. These units cost an average of HK$17,583 per square foot after discounts, representing an increase of nearly three percent from the previous batch. 

Furthermore, KT Marina 1 in Kai Tak recorded a rise in inquiries from mainland buyers, amounting to approximately 40 percent. This increase in interest followed the government's relaxation of stamp duty for non-residents.

28hse - No.1 HK Property Portal Squarefoot - HK Premium Property Portal