Hong Kong developers test homebuyers with modest price increases after sell-outs

Hong Kong developers are raising prices of new homes this week following sold-out launches in recent days, further testing the appetite of homebuyers amid geopolitical and interest rate uncertainties.Henderson Land Development put another 39 units at its Chester project in Hung Hom on sale on Monday, with 25 homes finding buyers as of 6.30pm, according to agents.With an average discounted price of HK$22,198 (US$2,831) per square foot, the units were priced 4.57 per cent higher than the 123 units that sold out on the project’s launch day on March 28, which had an average discounted price of HK$21,228 per square foot.“With demand holding steady, we expect developers to gently push prices upwards in new sales launches, rather than resorting to deep discounts again,” said Derek Chan Hoi-chiu, head of research at Ricacorp Properties. “This is a classic recovery-phase strategy: testing price elasticity without undermining the building momentum.”The Hong Kong Monetary Authority cautioned borrowers about the uncertain direction of interest rates following the US Federal Reserve’s decision last month to hold its benchmark rate at between 3.5 per cent and 3.75 per cent.As oil supply has been disrupted by the US-Israel war on Iran, the price of the commodity has skyrocketed, raising fears of a tightening monetary stance in the world’s largest economy.Hong Kong’s de facto central bank moves in lockstep with the Fed to keep the local currency’s peg to the dollar.