2025-02-21 28Hse Editor
CK Asset’s The Coastline II project in Yau Tong has been the talk of the town. The new development was sold at a record low price of HK$14,868 per square foot and received more than 30,600 pre-sale cheques, making it the most over-subscribed new development in Hong Kong's history. Capitalising on their success, the developer launched units of The Coastline I to maintain sales momentum.
The Coastline II is developed in two phases, providing a total of 886 units. Among them, The Coastline II comprises three blocks, providing 658 open-plan to three-bedroom units, measuring 210 to 723 square feet in size. The Coast Line I has only one block, providing 228 units with one to three bedrooms, measuring 273 to 736 square feet in size.
How much cheaper are flats of The Coastline II? If we compare with new developments in the same district, the last new development in Yau Tong is Chill Residence, developed by Poly Property. Its first batch of 128 units was launched in November last year, at an average of HK$17,938 per square foot. In contrast, the price per square foot of The Coast Line is 16.6% lower.
In addition, The Coast Line II is the cheapest new development in the last seven years, since the first batch of One Kai Tak (I) was launched in August of 2016 at a discounted average price of HK$14,472 per square foot.
The most attractive feature of The Coast Line II is that its price per square foot is lower than that of second-hand properties in the same district, even while second-hand owners are selling units at lowered prices or at a loss. Some people think that while cheap developments signal a bear market overall, others believe developers set low prices due to an unfavourable first-hand market.
Why would The Coast Line II units be sold at such low prices? The simplest reason is location. The development is located in an industrial area with three concrete plants nearby, affecting air quality. Subsequently, the developer used low prices as an attractive selling point.
Some believe that low prices of new flats are a sign that the developer wanted to speed up flat sales to secure more buyers due to a bearish sentiment. Though this is possible, we should look at other factors in this argument. As mentioned, it is possible that low prices were a sales tactic to draw the attention of prospective buyers.
It is possible that developers have rushed sell flats due to a shaky market, cashing in on selling units to ensure a considerable income from property sales this year. Apart from that, some analysts said that the reason for cheap home prices is there may be other investment returns that will outperform the market.
Regardless of the developer's reasons for the low prices, the project is selling well, reflecting the enthusiastic market response. Therefore, the developer capitalised on its success by launching sales of The Coast Line I, prioritising unsuccessful buyers of The Coast Line II. Each person is also entitled to an exclusive 1% discount, and can purchase up to 2 flats per person.
Following the releases of The Coast Line I and II, the latest new project launched is Villa Garda III, Lohas Park’s Phase 11D development. Its first price list offers 130 units, with a discounted average price per square foot of HK$16,938. This is 7.8% lower than the first batch of Villa Garda II units launched last year.
Under the spectre of interest rate hikes, buyers need to consider whether to enter the market. Meanwhile, developers will have to formulate a sales strategy to win market attention. So should all new developments be sold at low prices in the future? Undoubtedly, with large developers taking the lead in price cutting, other developers will be under pressure to set prices for new flats – but ultimately, it depends on the location and quality of the project.
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