Three home sites fetch high prices
A bird’s eye view of residential and commercial properties in Central, Hong Kong. Sun Hung Kai Properties Ltd acquired a residential parcel on Stubbs Road in the Mid-Levels for HK$4.49 billion Thursday. Mike Clarke / AFP |
Three sites went for high prices on Thursday, indicating that Hong Kong developers remained confident about the property market despite government measures to cool it.
Sun Hung Kai Properties Ltd acquired a residential parcel on Stubbs Road in the Mid-Levels for HK$4.49 billion. It was equivalent to HK$24,829 per buildable square foot, according to data provided by real estate broker Centaline Property Agency Ltd.
The land was sold in the middle of a range of market forecasts, in line with the HK$3.5 billion and HK$4.52 billion range polled by Dow Jones Newswires and the HK$4.4 billion median estimate by Bloomberg News.
Victor Liu, executive director of Sun Hung Kai Real Estate Agency, said the price was “reasonable” as the rare plot on the Mid-Levels was a “traditional luxury housing area”.
Liu said total investment on the parcel with a buildable area of 180,835 square feet could well exceed HK$8 billion.
During the second land auction in the fiscal year on Thursday, the government sold two other residential sites: one plot at Begonia Road in Kowloon for HK$579 million to China Overseas Land & Investment Ltd and the other at Ngau Tam Mei in Yuen Long, the New Territories, for HK$662 million to Cheung Kong Holdings Ltd.
Both prices are within the market forecasts. However, the HK$15,742 per buildable square foot of the Kowloon site and the HK$6,548 per buildable square foot of the Yuen Long site were the third and the fifth highest recorded in their respective areas.
Auctioneer G.M. Ross, deputy director of the Lands Department, said the high prices fetched in the land auction showed “developers’ demand on particular sites”.
He said they would have taken into account the fact that the government planned to boost land supply in the year, and that land banks to be auctioned later on might be of different types.
In April, Financial Secretary John Tsang said the government would try to boost land supply in the city by selling 12 sites in the second quarter – nine for residential development. His announcement came after the city’s home prices gained more than 55 percent in two years.
“Sentiments in the secondary market will be further lifted up by the high prices in the land sale,” said Ricky Poon, executive director of residential sales at Colliers International. “I believe property price will go up in the rest of the year. However, transaction volume may still be at a lower level as has been shown in the past months,” Poon told China Daily.
Earlier reports said local developers including Cheung Kong and Henderson Land Development Co have cut prices of new apartments at some of their projects by as much as 30 percent since the Easter Holidays in late April, on concern that higher mortgage rates and government curbs may dent home-buying sentiment.
Poon said it was still early to conclude that these developers had lost confidence in the mass market, as units sold on discount are usually leftover stocks and these listed companies also have the incentive to boost sales before presenting interim results.
“I believe the local developers are still optimistic towards the mass market,” said Poon.
John Siu, executive director with Cushman & Wakefield (Hong Kong) agreed. He said as developers’ sentiment was the barometer of the market, their active participation in competing for lands on Thursday showing their positive outlook for the future.
“But land sale is not helpful to cool the property market for the short term as construction will take three to five years. Due to short new apartment supply, Hong Kong’s home prices are still likely to rise another 5 to 10 percent in the year,” Siu added.
China Daily
(HK Edition 05/13/2011 page2)
http://www.chinadaily.com.cn/hkedition/2011-05/13/content_12501276.htm