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On March 24, 2025, New World DevelopmentClearwater Bay Resort(Mount Pavilia) recorded 9 large order cancellations, involving transactions totaling more than HK$420 million. These units were originally signed with provisional sales and purchase contracts between 2019 and 2021, and the buyers adopted the "Chairman Payment Plan" of up to 1,440 days, enjoying a long transaction period and early move-in benefits. However, these buyers ultimately chose to abandon the deal, resulting in the units failing to be sold. The developer then announced that it would put these nine units, along with a group of special units, back on the market with price reductions ranging from 17% to 51%, and they would be sold on a first-come, first-served basis on March 28. This incident quickly attracted market attention and was seen as one of the rare large-scale cancellation cases in the Hong Kong property market in recent years.
Tart order unit details
The saleable areas of the nine units ranged from 423 to 2,699 square feet. The original selling prices ranged from HK$10.541 million to HK$66.105 million, and the price per square foot ranged from HK$19,086 to HK$26,914. When it was resold, the price was adjusted to HK$8.043 million to HK$61.383 million, and the price per square foot dropped to HK$19,014 to HK$24,209, a reduction of between 17% and 32%. In addition, a special unit located in Room A on the 7th floor of Block 1 has seen a significant price reduction. The unit has a usable area of 1,920 square feet and an attached 1,478 square feet rooftop. The original price was HK$144 million, but it has now been reduced to HK$71.18 million, a drop of HK$511,330, making it the most eye-catching case in this incident.
1. What is "Da Da Ding"?
- It means that the buyer abandons the transaction after signing the preliminary sales contract, and loses the deposit paid (usually 5%-10% of the property price). In the nine cases involved this time, buyers may have chosen to default due to changes in financial planning, difficulties in mortgage approval, or pessimistic expectations for the future market.
2. Why is the resale price reduced to 51%?
- Market environment changes：In recent years, the Hong Kong property market has been affected by interest rate hikes, economic slowdown and immigration, and overall trading has been sluggish. Developers need to significantly adjust prices to attract buyers.
- Project positioning factors: The Peak is a low-density luxury housing estate with a relatively high original price (the average price per square foot was about HK$20,000 when it was first launched in 2017). Given the current market demand shifting towards small and medium-sized units, significant discounts are required to clear inventory.
- Developer Strategy：The developer (New World Development) may be in urgent need of cashing out to improve cash flow or free up resources for new projects, so it chooses "price cut promotion".
3. Risks of long transaction period
The Chairman’s 1440 Payment Plan allows buyers to complete the transaction up to nearly 4 years after signing the contract and offers early move-in discounts. The scheme is attractive during the property market upturn from 2019 to 2021, particularly for investors or buyers who want to defer payment. However, with the changes in Hong Kong’s economic environment in recent years, including interest rate hikes, stock market fluctuations and a slow economic recovery after the epidemic, some buyers may choose to cancel their deposits (usually 10% to 15% of the property price) due to financial pressure or lack of confidence in the market outlook.
4. The luxury housing market is weak
Clearwater Bay Residences is positioned as a high-end residential project, featuring low-density mansions and special units. It has attracted many celebrities to live here, such as Pakho Chau, Kenny Kwan and Benjamin Yuen, and is known as the "celebrity housing estate". However, demand in the luxury housing market has slowed significantly in recent years. According to market data, Hong Kong's luxury home transaction volume in 2024 will fall by about 30% from its pre-epidemic peak, mainly affected by capital outflow, high interest rate environment and investors turning to other assets. Aolong’s cancellation of order may reflect the intensification of this trend.
5. Downward pressure on property prices
Since 2022, the Hong Kong property market as a whole has entered a period of adjustment, with second-hand property prices in some areas falling by more than 20%. Although Clearwater Bay, where Pavillion is located, is known for its quiet environment and high privacy, its secondary market has also seen a significant depreciation in recent times. For example, a three-bedroom unit in Mount Pavillion was sold for HK$13.08 million in October 2024, a drop of approximately HK$271,000 from the purchase price; another unit was even put on the market at a loss of more than HK$4 million. This downward price trend may shake the confidence of early buyers in holding on to the property, causing them to cancel their orders to cut their losses.
6. Impact of the incident and subsequent observations
- Impact on market confidence：A significant price cut may intensify market wait-and-see sentiment, and potential buyers may expect more properties to follow suit and reduce prices.
- Luxury housing market fragmentation: The demand for mid- and low-priced properties is relatively stable, but the sales cycle of high-end luxury homes may be further prolonged due to the shrinking buyer group.
- Developers adjust pricing strategies：In the future, the pricing of new properties may be closer to the market's affordability, and flexible payment options may be added to reduce the risk of cancellation of orders.
7. Market reaction and impact
Buyers' wait-and-see attitude intensifies
Aolang's drastic price cuts may cause the market to further wait and see. For buyers interested in purchasing Mount Pavillion, the price drop of 51% suggests that there is still room for property prices to fall, which may prompt them to wait for lower prices. For owners of properties in other luxury housing projects, this incident may increase the pressure of losses and affect the stability of the secondary housing market.
Developer confidence tested
As one of the major developers in Hong Kong, New World Development has seen large-scale cancellations and price cuts at its flagship project, Mount Pavillion, which undoubtedly poses a challenge to its brand image and market confidence. Industry insiders pointed out that if other projects follow this strategy, it may trigger a chain reaction and intensify competition in the property market.
Impact on the Clearwater Bay area
The Pavillion incident also has potential impact on the overall property market in Clearwater Bay. The area is dominated by luxury homes and low-density residences. The second-hand transaction case of the price per square foot of Mount Pavillion falling below HK$9,000 (see report on March 25, 2025) has set a new low in the region. If the price reduction trend continues, other housing estates such as Pak Shek Terrace and Pik Wan Court may need to adjust their prices accordingly, creating downward pressure on regional housing prices.
8. Deep-seated factors and future prospects
Uncertain economic environment
The Hong Kong property market is subject to the global economic trend. The U.S. Federal Reserve's interest rate hike cycle has not yet ended. The Hong Kong dollar is pegged to the U.S. dollar, resulting in high local mortgage rates (Hibor in March 2025 is approximately 4.5%), which increases the cost of home ownership. At the same time, weakening economic ties between China and Hong Kong and reduced capital inflows from the mainland have also weakened the support of the luxury housing market.
Policy and market regulation
In recent years, the Hong Kong government has relaxed some tough measures on the property market, such as reducing stamp duty and relaxing mortgage ratios, in an attempt to boost the property market. However, these measures have limited impact on the luxury housing market, and the cancellation of orders for Ao Long shows that even well-known projects find it difficult to fully resist downward market pressure. If the government introduces more stimulus policies targeting luxury homes in the future, it may be able to alleviate similar situations.
Long-term prospects of Aolang
Despite the short-term challenges, Alonso's long-term value remains promising. Its superior geographical location, complete facilities and "star effect" are still the selling points that attract buyers. If the market gradually stabilizes, the discounted units may become an opportunity for buyers for self-use to enter the market, driving the project to digest its inventory.
9. Data supplement
- Among the units resold this time, the price of some units has dropped from the original price of HK$53 million to HK$26 million, a drop of up to HK$51%, which is rare in recent years. According to Centaline Property data, Hong Kong's overall housing prices in 2023 have fallen by about 15% from the high in 2021, and the decline in some luxury homes has exceeded 20%.
Summarize:
The fact that Clearwater Bay's Pavilia recorded nine consecutive cancellations of large orders and resold units at a price reduction of up to 51% is a microcosm of the current predicament of the Hong Kong property market. This incident not only reflects the weakness of the luxury housing market and the shaken investor confidence, but also highlights the pressure developers face in a high-interest environment. For buyers, this may be a good opportunity to enter the market, but they also need to be wary of the risks of market volatility. For New World Development, how to balance the liquidation speed and brand image will be a key challenge in the coming months. For the entire Hong Kong property market, the fate of Peak Towers may become an important indicator for observing market trends.
This incident highlights that the real estate market has entered a period of deep adjustment, especially the luxury housing market, which needs longer time to digest the inventory. For buyers, they need to carefully assess their own financial capabilities and market risks; for investors, in the short term, they may pay attention to the discount opportunities brought about by developers' accelerated inventory reduction, but in the medium and long term, they still need to observe interest rate policies and economic recovery progress.
Further reading:
- In-depth analysis of Hong Kong's property market policies in the 2025-26 Budget
- Sai Kung's top luxury building "Ao Long" has become the hardest hit area in the property market! 3-bedroom units suffer losses 30% reveals the dilemma of luxury homes. The trend of celebrities selling their shares to cash out hides three major warning signs
Mount PaviliaLocated inHongkongSaigonClearwater Bay PeninsulaTai Po TsaiClear Water Bay RoadNo. 663 (The Hong Kong University of Science and Technologyrear), yesNew World and Puji develop togetherofLuxury ResidencesHousing estate, byWong Tung ArchitectsDesign, September 2011New World DevelopmentResponsible for reaching a land premium agreement with the government at a price of HK$6.64 billion, which is approximately HK$6,148 per square foot based on the total project area of 1,078,517 square feet. The property site area is 719,035 square feet, divided into 21 blocks and 6 residential towers, providing a total of 680 units. It was completed in the fourth quarter of 2016. The housing estate had obtained pre-sale consent as early as January 2016, but the first batch of units were not put out for tender until the end of April 2017.
