Weekend primary home sales dropped 39%

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According to Maybank Kim Eng, primary residential property recorded 92 transactions, a 39% drop compared with previous 5-day period over the Chinese New Year holiday. Fifty and 26 units of Residence 88 (Yuen Long, developed by SHK Properties (16)) and The Reach (Yuen Long, JV by Henderson Land (12) and New World Development (17)) were sold over the weekend, respectively. 

Maybank adds, over 180 units of the project were sold since launch last Wednesday, representing 51% of total 352 available units.

Here's more:

The developer expects that proceeds of HKD2.1b will be fetched from the project, translating into a target ASP of HKD9,013 psf of GFA. The Avery (Kowloon City, developed by Sino Land (83)) is expected to be launched on Thursday. The first batch of 30 units (out of total 78) is priced at cHKD4m, or HKD12-14k psf of GFA. 

Implication: The sales momentum in the primary residential market remained strong ahead of February 27th’s budget speech by Financial Secretary, and major developers’ reporting season (Sino Land and SHK Properties will announce their 1H6/13 results next Wednesday and Thursday, respectively).

We expect that developers will continue to benefit from the current strong physical market sentiment in pricing and launch of development projects. Action: Maintain our positive stance on local developer sector in short-run.