Flat Sale Battle: How Developers Are Navigating Hong Kong’s Competitive Property Market

According to data from developers and the market, 85 new residential projects are expected to launch across Hong Kong this year, providing around 32,600 units. Amid fierce competition, how can developers ensure their projects stand out and achieve quick sales?

When buyers choose a new property, they typically prioritise factors such as location, price, clubhouse facilities, nearby amenities, move-in dates, and the unit's potential for appreciation. Among these, pricing is often the most decisive factor. If prices are set too high, buyers are naturally less inclined to make offers. 

Most developers are publicly listed companies that must deliver annual financial results. If sales for a new project lag, it can undermine shareholder confidence, affect stock prices, and even hinder the company’s ability to raise funds. To attract more buyers, developers often focus on competitive pricing strategies, such as the “buy more, enjoy more” sales technique. 

The phrase "buy early, enjoy more" is frequently heard in the market. This is because many developers adopt a tiered pricing approach. The first batch of units is often priced attractively, typically 5-10% lower than comparable new or second-hand properties in the same area, to generate initial interest and test the market’s response. These early units tend to sell quickly due to their perceived value.

To maintain flexibility and adapt to market changes, developers rarely lower their prices outright. Instead, they adjust payment options or offer discounts. For instance, an early buyer opting for an immediate payment plan might receive a 10% discount on the property price. If sales go well, subsequent price lists may reduce the discount to 7%, making early buyers feel they’ve secured a better deal.

This dynamic creates the perception that new properties become more expensive over time, reinforcing the belief that buying early is advantageous. However, this is essentially a gamble between buyers and developers. Prices don’t always rise; they can drop. If a buyer signs a provisional agreement and later discovers that similar units are being sold at a lower price, they are unable to claim the difference. The buyer must either complete the transaction or forfeit their deposit.

To further entice buyers, some developers offer interest-free or deferred payment financing plans, which effectively act as price discounts. Developer-provided mortgages—offered through the developer or affiliated finance companies—allow buyers to secure high loan-to-value ratios.

For developers, such financing options attract first-time buyers, self-employed individuals, or others who may struggle to secure traditional mortgages. This accelerates sales, enabling developers to recover their investments faster while maintaining pricing levels and boosting profitability. 

For buyers, these developer mortgages offer certain advantages. They are not subject to Hong Kong Monetary Authority regulations, meaning income requirements are more lenient. Buyers can secure high loan-to-value mortgages without needing mortgage insurance, eliminating related costs. However, once the low-interest "honeymoon" period ends, mortgage rates can rise significantly. As a result, many buyers refinance their loans with banks as soon as possible.

Currently, around 20,472 unsold units remain on the market. With new projects competing against this inventory and second-hand properties, developers must adjust their pricing strategies. Offering attractive starting prices for the first batch of units or introducing limited-time promotions is often essential to capturing market attention and securing early sales.

For more 28hse real estate information

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