Homebuyers take up two-thirds of Sun Hung Kai’s Yoho Hub flats in Yuen Long as recovery, rate outlook underpin demand

More than two-thirds of the 325 units had been sold by 7pm local time; an industry executive expects take-up rate to surpass 90 per cent

Yoho Hub, with 1,030 units in total, is the most expensive of new developments in the Yuen Long neighbourhood

Sun Hung Kai Properties, Hong Kong’s biggest developer, enjoyed a brisk festive weekend home sales as signs of economic recovery encouraged buyers to pick up more than two-thirds of the units in its latest housing project.

The developer sold 220 of the 325 flats on offer at The Yoho Hub as of 7pm local time, according to property agents. The project is located in Yuen Long, New Territories, a 40-minute train ride from the city centre. The take-up rate could surpass 90 per cent by the end of the day, an industry executive said.

“That reflects good demand,” property agent said, who expects about 300 units to be sold. “The project is welcome because it’s close to the railway station and has shopping malls nearby.”

Hong Kong’s robust recovery from Covid-19 appears to have injected optimism, with the city’s unemployment rate falling to the lowest level since the pandemic outbreak in early 2020. Homebuyers also shrugged off concerns about the negative wealth effect as the stock market rebounded over the past week.

Some buyers may be bringing forward their purchases before a possible increase in borrowing costs as the US started dialling back its monetary stimulus and plotted rate increases from next year. Hong Kong conducts its policy in lockstep with the Federal Reserve’s actions.

The Sun Hung Kai project, sitting atop the Yuen Long railway station, is the most expensive for any new developments in the neighbourhood, based on the average selling price of HK$19,899 (US$2,551) to HK$21,700 per sq ft in different launch batches.

The flats available on Sunday come in sizes ranging from 325 to 1,036 sq ft, starting from HK$6.85 million to as high as HK$15.55 million, after factoring in a 12 per cent discount. The cheapest of the lots is a 325-sq ft one-bedroom unit on the sixth floor of Block One.

The entire development consists of 1,030 units in four high-rise towers. It is expected to be completed in March 2023.

The northern part of the city came into sharper focus in recent weeks after the government unveiled in October a long-term plan to develop the region into a Northern Metropolis, an area to be populated by 2.5 million residents within 20 years.

Elsewhere, supply of new homes likely has increased by 14 per cent this year to 36,919 units, according to the estimate of another property agency. Second-hand home prices fell by 0.86 per cent in October from a peak in August, the biggest monthly decline in 14 months.

While Morgan Stanley predicts that prices of lived-in houses will decline 2 per cent next year, property analysts and consultants are still upbeat. Some of the property consultancy expect prices to rise between 3 per cent and 10 per cent, citing limited supply.