Hong Kong developers are gradually raising prices amid growing confidence in the city’s property market prospects following a series of measures that have pushed buyers into the market.

Chinachem Group on Monday slightly increased the price of the second batch of apartments at the 198-unit Echo House residential project in Cheung Sha Wan after 5,500 buyers registered for 100 units put up for sale.

The batch of 50 units will have an average price of HK$15,440 (US$1,987) per square foot after discounts, 3.7% higher than the first listing’s HK$14,888. Echo House is a joint development with the Urban Renewal Authority.

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“Supported by multiple favorable factors, including interest rate cuts, a stock market recovery and beneficial policy measures for the housing market outlined in the policy speech, market sentiment has improved significantly,” said Derek Chan, head of research at Ricacorp Properties.

“The volume of new property transactions has increased significantly, showing robust performance with buyers actively entering the market. Developers are able to implement small price increases.

The price of the first 50 units of Echo House launched last week was the lowest in the district since 2016, when Henderson Land launched its Park One project at HK$13,000 per square foot, according to real estate agents.

The price increase comes after the government relaxed mortgage financing, allowing buyers to borrow up to 70 per cent, regardless of the value or intended use of the property. The debt service ratio was also raised from 40 to 50 percent, with the same guidelines for residential and non-residential properties.

Homes valued at more than HK$30 million will be eligible for 70 percent financing, up from 50 to 60 percent previously, according to the Hong Kong Monetary Authority.

Likewise, further interest rate cuts are in sight following the initial 50 basis point cut last month by the US Federal Reserve and the HKMA.

Chan added that if an apartment package sells well, developers will have the option to make minor price adjustments with each subsequent release.

CK Asset Holdings and Sun Hung Kai Properties sold a total of 407 units on Saturday and Sunday, according to agents. This represents more than 80 per cent of the overall 504 units available for Blue Coast II at Wong Chuk Hang and Cullinan Sky Phase 2 at Kai Tak respectively, the first weekend following chief executive John Lee Ka-chiu’s policy speech. .

Encouraged by the political rhetoric, developers have accelerated the launch of projects, said Sammy Po Siu-ming, CEO of Midland Realty’s residential division.

“Although some developers have increased the prices of remaining units in some new projects, most continue to actively sell their inventory,” Po said. “Therefore, the pricing of new projects generally remains conservative, (as developers) give priority to price rather than volume. »

Hong Kong developers still hold around 20,000 unsold new homes, with an additional 25,000 units expected to become available next year, according to CBRE Hong Kong.

However, not all developers feel confident about raising prices.

Early Light International Holdings, controlled by tycoon Francis Choi Chee-ming, has slightly reduced the average price of The Uppland project at Gold Coast Bay in Tuen Mun following low participation in the previous round.

The price was lowered to an average of HK$11,770 per square foot, from HK$11,813 in August. The company is selling 152 units on Friday and another 32 through tender.

In August, the project found buyers for only 12 percent of the 139 apartments on the first day of launch.

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