Business brisk at Vision City
Speculators were noticeably absent during the weekend sales in Tsuen Wan
Brisk sales in the past few days at Sino Land's Vision City residential project in Tsuen Wan have put the primary property market in a positive light, but analysts wonder how long the optimistic mood will last.
'It's a good start, but I'm not sure the positive feeling will spread to the entire housing market,' said Shih Wing-ching, chairman of Centaline (Holdings), which controls Centaline Property Agency, one of Hong Kong's two biggest property agents.
He said he understood that most of the Vision City buyers were end users. The noticeable absence of speculators and investors meant there would be no dramatic shifts in market activity.
More than 300 Vision City units, about a fifth of the project's total, were snapped up over the long weekend. The show flats were seen by about 80,000 people.
Vision City is on Tai Ho Road and Yeung Uk Road, in Tsuen Wan.
The redevelopment is a joint venture by the Tsuen Wan Town Centre and the Urban Renewal Authority.
It is scheduled for completion in the third quarter of next year, and will comprise 1,466 flats across five 65-storey towers. There will be a total of 500,000 square feet of space. Prices range from $4,488 per sq ft to $7,122 per sq ft (an average of $5,400 per sq ft). The price represents a 10 per cent premium over comparable projects in Tsuen Wan.
Vision City is the largest residential project to be launched in Hong Kong so far this year.
Mr Shih said most of the end-user buyers were Tsuen Wan residents who had been living in the area for decades.
'But there's no guarantee the next developers coming on the scene will get as good a response when they start launching projects,' he said.
Mr Shih said part of the reason there were no speculators around was because many had stocked up on flats last year and had not yet offloaded these accumulated assets.
Pricing was another reason. Vision City figures were not low enough to attract speculators.
'Sales of first-hand flats have been slow since the fourth quarter of last year. This is because developers have overpriced their products. The fact that new flats will be in short supply over the next two years has been factored into these prices,' Mr Shih said.
The Rating and Valuation Department forecasts the supply of private domestic units will be 17,200 this year and 16,400 next year, compared with an annual average of 24,853 from 1996 to last year.
Midland Realty chief analyst Buggle Lau Ka-fai said developers were likely to tempt buyers with a variety of incentives.
'Because most of the buyers are end users, developers will be expected to come up with preferential mortgage packages or free-furniture incentives, such as $1 for a plasma television,' Mr Lau said.
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