Home prices in one of the world's most expensive property markets have retreated again since May after a short-lived bounce early this year from a 15% decline in 2022. Potential homebuyers were deterred by rising interest rates and the weak economic outlook.
CK Asset, owned by tycoon Li Ka-shing, said on Thursday it would sell the first 132 units of Coast Line II, a development in eastern Kowloon, at prices between HK$13,443 to HK$16,407 ($1,721-$2,101) per square foot after discounts.
The prices are around 20% below market rates in the area, and the lowest unit price in the launch - HK$2.9 million for a 210 square-feet studio apartment - is the cheapest in Hong Kong since 2019, property agents said.
"All the other developers are under pressure," said Louis Chan, Asia Pacific vice chairman of Centaline Property Agency. "It will intensify a price war that has already started."
Chan said two new developments have suspended sales in July, sending a very negative signal to the market that there was a lack of demand. He expected developers would be more cautious in starting new sales in the second half.
In an earnings conference on Thursday, CK Asset chairman Victor Li told analysts that Coast Line is selling at floor prices last seen seven years ago and the company "likes to sell at market price or lower to generate turnover".
"If a person wants to buy a home for his or her own use, and can afford it, I think now is actually a better time than 3 years ago," Li said, citing a lower risk when the market is bleak and interest rates are high because the likelihood of rates dropping is higher than rising.
"It's always safer to employ a counter-cyclical approach when it comes to investing, whether a person is to buy his home or us buy land," said Li.
($1 = 7.8086 Hong Kong dollars)
(Reporting by Clare Jim; Editing by Kim Coghill)