Are Leftover New Flats Always Cheaper?

Currently, Hong Kong has around 20,000 unsold units from new developments. In the past, developers often offered special discounts on these leftover units to attract buyers. Some of these units are already completed and ready for occupancy, but what should buyers watch out for when purchasing them? 

There are three main reasons why leftover units exist. One common reason is buyers forfeiting deposits, where the original buyers back out of the deal, leaving the developer to relist the units for sale. Another reason is that developers may choose to hold onto certain units, waiting for the right timing to sell, such as at the end of the year or after announcements like the Budget. Lastly, some units remain unselected due to factors such as location, layout, or overall quality, often referred to as the “bottom of the barrel.”

However, leftover units are not always of poor quality. Buyers should carefully check the details before committing to a purchase. It is important to review the Sales of First-hand Residential Properties Electronic Platform (SRPE) to see if the unit has any history of cancellations. Buyers can also consult the developer’s published sales arrangements to confirm whether the unit was previously listed. 

Leftover units can be categorised into two types: off-plan and completed. Off-plan leftover units are still under construction, so buyers need to wait until the property is completed before moving in. The waiting time, however, is usually shorter compared to buyers from the first batch. 

Completed leftover units, on the other hand, are ready for immediate occupancy, making them ideal for those with urgent housing needs. However, if the unit has been completed for a long time and has remained vacant, there may be issues such as wear and tear in the interior or furniture, or hidden problems that are not immediately visible. Buyers are strongly advised to hire a professional inspector to check the unit thoroughly and request the developer to fix any issues before moving in. 

Whether leftover units are cheaper than others largely depends on the developer’s strategy. Some developers may offer steep discounts to sell the remaining units quickly, while others might provide incentives such as free parking spaces to attract buyers. However, if the leftover units are of higher quality, such as those with better views or larger layouts, developers may increase the price rather than offer discounts.

Management fees are another factor buyers need to consider as part of the overall cost. In recent years, management fees for new developments have been rising, averaging over HK$5 per square foot, with luxury properties and standalone buildings often reaching HK$7–8 per square foot. These fees can significantly add to homeowners’ financial burden. One benefit of buying leftover units is that developers may have already disclosed the management fees by the time the units are sold. This transparency helps buyers avoid unexpected costs after the purchase. 

In conclusion, leftover units are not always lower quality or cheaper. Buyers must do their due diligence by inspecting the units thoroughly, checking transaction histories, and considering long-term costs such as management fees. With careful planning, leftover new flats can still be a worthwhile option for those looking for discounts, incentives, or immediate occupancy. 

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