A surprise cut in unit prices at the latest project of Cheung Kong Holdings (0001) has prompted speculation that the home market has peaked.
Prices at One West Kowloon in Cheung Sha Wan were reduced by an average of 11 percent.
Cheung Kong became the first developer to trim prices following the latest round of government curbs imposed on the property sector from February 22.
The first batch of around 50 flats - now all sold - was put in the market in November at an average price of HK$9,750 per square foot in terms of gross floor area.
Yesterday Cheung Kong offered another 20 apartments for sale at an average price of HK$9,147 psf. One Kowloon West consists of 286 units.
A three-bedroom 1,160 sq ft flat saw the sharpest cut. It is now priced at HK$10.17 million - 17.5 percent lower than the original HK$12.31 million.
The new prices are on par with the adjacent 10-year-old Banyan Garden, where flats are selling at an average of HK$8,983 psf.
Cheung Kong executive director Justin Chiu Kwok-hung said the price cut includes a rebate of the double stamp duty "in a bid to echo the government's effort to help Hongkongers buy their own homes."
The stamp duty on second home purchases has doubled to a maximum rate of 8.5 percent.
Chiu admitted the latest curbs could affect the secondary home market, but any impact may not be evident in the near term. He also vowed to offer discounts at other Cheung Kong projects, but he did not elaborate.
Cheung Kong earlier said it will launch five projects this year having a total of 5,238 units - the highest among local builders.
Shih Wing-ching, founder of Centaline agency, said the price cut at One West Kowloon showed that doubling the stamp duty has weighed on new home sales.
Vincent Chan Kwan-hing, Midland residential chief executive, said other developers may follow Cheung Kong.
Sun Hung Kai Properties' (0016) deputy managing director Victor Lui Ting said it will not join a price war, while Wheelock vice chairman Stewart Leung Chi-kin said it is difficult to say whether there will be a price war.