Li Ka-shing's Dongguan project reduced by ten thousand yuan, institutions: Dongguan's new housing inventory turnover period has been above the warning line for 12 consecutive months

After multiple projects in Hong Kong were discounted for sale, Li Ka-shing's project in Dongguan, Guangdong has also started to reduce prices for promotion.

Recently, market news shows that Li Ka-shing's "Seaview Palace" project in Dongguan is on sale starting from 50% off. It is reported that the project has launched special price units, with the lowest unit price at around 13,000 RMB per square meter, starting from 900,000 RMB for two-bedroom units and 1.2 million RMB for three-bedroom units.

In response to this, a reporter from The Paper called the sales office of the project, and the sales staff said, "There are still some remaining units for sale now, all on the 5th floor or below, with prices ranging from 14,000 RMB per square meter to 15,000 RMB per square meter."

The sales staff further stated that the special price units introduced this time range from 13,000 RMB per square meter to 16,000 RMB per square meter, and the promotion could end at any time. "There are relatively few units at 13,000 RMB per square meter on the lower floors and 16,000 RMB per square meter on the higher floors. For example, there are only two units at 13,000 RMB per square meter on the 1st floor, which have been sold out. Currently, the units for sale are mostly priced between 14,000 RMB per square meter and 15,000 RMB per square meter, with areas of over 90 square meters and over 120 square meters."

The official WeChat public account of the project also released relevant information on July 5th, stating, "Exquisite foreign-style houses are open for viewing, with immediate delivery of the buildings. To celebrate the 27th anniversary of Hong Kong's return, some units with group purchase discounts are being offered for a limited time and in limited quantities."

The poster displayed in the article shows 8 selected units with prices around 14,000 RMB per square meter, accompanied by the text "This promotional activity has attracted many customers to visit, with over 250 groups of visitors in the past two days."

Securities Daily quoted sales staff as saying that the previous selling price of the project was around 23,000 RMB to 24,000 RMB per square meter. Based on this calculation, the selling price per square meter of the project has dropped by nearly 10,000 RMB. At the same time, these foreign-style houses have been on record for a long time, so it cannot be said that the prices have "plunged" or dropped suddenly, but rather that they have been reduced to increase sales volume.

A real estate agent in Dongguan told The Paper that the claim of 50% off is a bit exaggerated, and there are only 2 units available at 13,000 RMB per square meter, which can only serve as a traffic driver. In terms of location, the property is located at the junction of Nancheng and Houjie in Dongguan, surrounded mainly by schools and mountains, relatively remote, and lacking in commercial facilities. Looking at the listing prices of second-hand properties in the area, many units are also priced at 13,000 RMB to 15,000 RMB per square meter.

Publicly available information shows that Seaview Palace is a project developed by Cheung Kong Property Holdings under the Changjiang Real Estate Group, located next to Henggang Reservoir in Houjie Town, Dongguan. It covers a total area of over 7,000 mu and a total construction area of 2 million square meters, making it one of the few large-scale projects in Dongguan. According to public reports, the Seaview Palace project has been developed for 25 years since Cheung Kong Property Holdings acquired the land in 1999. During this period, they were fined nearly 80 million RMB for land hoarding for 95 months, but then delayed for another 5 years.

As of the time of publication, Cheung Kong has not responded to the price reduction sales move.

Li Yujia, Chief Researcher of the Guangdong Housing Policy Research Center, believes that for the current project in Dongguan, which was approved for pre-sale in June 2023, it has been a year since then. Even the average selling price of new houses in Dongguan has dropped by 20% in this year. The project has been slow to sell out since pre-sale, and a significant discount to clear inventory is a normal choice.

Chen Xueqiang, Research Director of the South China Branch of China Index Research Institute, pointed out that the price reduction of Haiyi Haoting is not accidental, but a marketing strategy of exchanging price for volume. In recent years, the new housing market in Dongguan has been relatively sluggish, with monthly transactions averaging around 2,000 units. Even under policies such as lifting purchase restrictions across the city, market transactions remain low, prompting developers to drive transactions through price reductions.

According to data from the Hoifu Research Institute, in June, the transaction area of first-hand residential properties in Dongguan was approximately 210,000 square meters (1,700 units), a decrease of about 13% year-on-year, but an increase of nearly 30% month-on-month. In terms of prices, the average price is about 26,000 yuan per square meter, a significant 33% year-on-year decrease, and a slight 2% decrease month-on-month. The significant year-on-year decline is mainly due to the high base in the same period last year.

Looking at the regional perspective, in the first five months of this year, house prices in Houjie Town, where Haiyi Haoting is located, decreased by 7% year-on-year.

Behind the "exchange price for volume" strategy, the inventory turnover speed of new housing projects in Dongguan is also not ideal.

Institutional monitoring data shows that in the first half of this year, the overall turnover rate of new projects in Dongguan was only about 5%. With a significant reduction in new listings in June and the opening of hot projects, the turnover rate increased from about 3% in May to 19%.

Chen Xueqiang mentioned that against the backdrop of continued relaxation of control policies in first-tier cities such as Guangzhou and Shenzhen this year, the squeeze on surrounding third and fourth-tier city markets has become more prominent. Faced with market competition pressure, developers have to adopt price reduction promotion strategies, which are also quite common in the current Dongguan market.

According to data from Hoifu Big Data, as of the end of June 2024, the inventory area of first-hand residential properties in Dongguan is approximately 4.28 million square meters, a slight 3% decrease month-on-month, and a 16% increase year-on-year. Calculated based on the average turnover speed of the past 3 months, the inventory turnover is about 24.6 months, which has been above the warning line for 12 consecutive months. However, due to the significant tightening of supply in June, with improving transactions, the overall inventory turnover pressure has slightly eased.

In June, the supply of first-hand residential properties in Dongguan was 84,000 square meters (601 units), a sharp 70% year-on-year decrease, and a decrease of about 40% month-on-month, making it the only month this year with a supply scale of less than 600 units.

Looking at the second-hand housing market, in June, there were 2,238 second-hand housing transactions in Dongguan, an increase of 9% month-on-month but a decrease of 20% year-on-year. The transaction area was approximately 246,000 square meters, an increase of 4% month-on-month but a decrease of 20% year-on-year. The transaction price was about 17,650 yuan per square meter, a slight 2% decrease month-on-month and a 20% decrease year-on-year.

Chen Xueqiang mentioned that the overall real estate market in Dongguan is still at the bottom in the first half of the year. It is expected that the market will rebound overall in the second half of the year under the continued fermentation of policies. However, due to uncertain expectations of residents' income and the real estate market, the rebound in market transactions is expected to be relatively slow Author of this article: Ji Simin Tang Yingying, Source: The Paper, Original Title: "Li Ka-shing's Dongguan project reduced by thousands, institution: Dongguan new house turnover cycle has been above the warning line for 12 consecutive months"