Hong Kong Developer Prices Luxury Homes at Record Low Amid Debt Concerns

New World Development has launched a luxury residential project on Hong Kong Island at a record low price of HK$20,932 ($2,668) per square foot. This is the lowest price for a new residential project in the southern district. The developer aims to accelerate property sales amid debt concerns and a sluggish economy. Hong Kong's property market has been struggling with declining home prices and a rise in households with negative equity.

New World Development (NWD) has priced a luxury residential project on the south side of Hong Kong Island at HK$20,932 per square foot, marking the lowest price for a new residential project in the city's posh southern district [2]. The Deep Water Pavilia project, co-developed by NWD, Empire Group, CSI Properties, and Lai Sun Development, aims to accelerate property sales amidst significant debt concerns and a sluggish economy.

The project, comprising 101 units including 95 two-bedroom flats, two three-bedroom units, and four four-bedroom homes, is priced from HK$8.5 million to HK$37.2 million, with the first sale expected to commence as soon as next week [1]. The pricing is around 30% lower than the first batch at Southland, the first phase of Southside, which launched in April 2021 [1].

NWD's move comes amid heightened financial pressure. The company has deferred interest payments on four perpetual bonds worth US$3.4 billion, a move that has led to a significant drop in its shares and bonds [3]. The developer is in talks with lenders to complete a HK$87.5 billion refinancing deal by the end of June, with commitments of more than HK$35 billion secured so far [3].

The broader Hong Kong property market has been grappling with declining home prices and a rise in households with negative equity. Home prices have declined by about 29% from their peak in 2021, and the number of households in negative equity is at its highest since 2003 [2]. The industry has been under pressure since 2019 due to price falls, lower sales, and higher borrowing rates.

NWD's strategic pricing and acceleration of sales are part of its efforts to improve its financial position and turn around its business. Despite years of efforts to increase cash flow and improve its balance sheet, the company's net debt, including perpetual bonds, stood at HK$165 billion as at end-2024, while net gearing rose further to 91% [3].

References:
[1] https://www.scmp.com/business/article/3313219/new-world-development-and-partners-set-record-low-price-southside-hong-kong-flats
[2] https://www.bloomberg.com/news/articles/2025-06-05/new-world-prices-hong-kong-island-luxury-home-project-at-new-low
[3] https://www.businesstimes.com.sg/property/hong-kong-property-firm-new-worlds-securities-tumble-after-coupon-payments-deferred