Hong Kong Property:Come find us,investors and mainlanders!

Event

    CK Property has announced a 100% stamp duty subsidy for homebuyers foreight houses in its new project, Crescendo. We believe this is primarily amarketing tactic given the scale of offer (8out of 67houses), and ‘competitivefinancing’ to circumvent part of the cooling measures introduced by thegovernment. We expect more developers to offer similar schemes to reducethe upfront cost (stamp duty) for homebuyers, but these costs could be addedback to the aggregate apartment price. We estimate a GP margin of 25% forthe project based on the effective ASP of HK$13.7k psf.

    The offer underpins our view that the primary market will take share from thesecondary market in the coming years, given: 1) developers’ competitivefinancing schemes to home buyers are unavailable in the secondary market;and, 2) more units are available for sale. We estimate ~4.9k units available forsale in the near term.

    Impact

    2017