Fri, Nov 23, 2018 - Page 10 News List

Developers in Hong Kong offer property discounts

Bloomberg

Hong Kong developers are offering discounts at new projects in the latest sign the territory’s housing boom is coming off the boil.

Country Garden Holdings Co (碧桂園) and Wang On Properties Ltd (宏安地產) are giving discounts of as much as 12 percent at their Altissimo project in the New Territories, a price list showed.

Employees of the two developers are granted an additional 5 percent deduction.

Lai Sun Development Co (麗新發展) has cut prices 10 percent at eight units in a project on Hong Kong Island.

Developers have been offering discounts and enticements including cash rebates and shopping vouchers.

New home sales might fall as much as 10 to 15 percent by value in the next year to 18 months, Moody’s Investors Service said on Wednesday.

That added to a chorus of bearish calls on a property market ranked the world’s least affordable, with some analysts forecasting prices would slump as much as 15 percent next year.

The discounts were announced after secondary-home prices last week dropped the most since 2016, sliding 1.3 percent from the previous week, according to the Centa-City Leading Index.

Country Garden, China’s biggest developer by sales, raised HK$7.83 billion (US$1 billion) in a convertible bond sale as it takes on higher-cost funding to push out repayments.

The company priced its sale of five-year convertible bonds with a 4.5 percent coupon, according to a Hong Kong exchange filing yesterday.

The proceeds are to be used to help fund a repurchase of zero-coupon convertible bonds due in January, while any remaining proceeds would be used to refinance offshore debt, the filing showed.

Shares of Country Garden, backed by billionaire Yang Huiyan (楊惠妍), fell as much as 5.3 percent after trading resumed in Hong Kong yesterday.

The developer has declined 34 percent this year, making it the worst-performing member of the Hang Seng Properties Index, which has dropped 9.4 percent over the period.

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