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HK auctions land 33% below estimates
Source: Bloomberg News |
August 10, 2011, Wednesday
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HONG Kong's government, which is boosting housing supply to ease soaring home prices, yesterday sold a site at auction 33 percent below estimates after stock markets were roiled by the United States's debt downgrade.
A group including Kerry Properties Ltd and Sino Land Co bought the land in Sha Tin district on the first bid for HK$5.5 billion (US$704 million), below the HK$8.25 billion median estimate of five in a Bloomberg News survey. Transactions of used apartments at the 10 biggest private projects in Hong Kong fell over the weekend from a week earlier as buyers were deterred by concerns the US's loss of its top credit rating will extend equity declines.
The government accelerated land sales this fiscal year in a bid to stem a more than 70 percent gain in home prices since the beginning of 2009.
"The surprising price shows developers' long-term concerns under financial turmoil," according to Hong Kong-based Yu Kam-hung, the senior managing director at CB Richard Ellis Group Inc. "I expect a 20 percent price downturn in the coming two years."
The threat of more government curbs, and rising mortgage rates, drove the number of home deals in the city to a 30-month low in July.
Transactions of used apartments at the 10 biggest private projects fell to 24 over the weekend from 31 a week ago, according to Midland Holdings Ltd, the biggest publicly traded real estate agent in the city. Home prices may drop 5 percent to 7 percent before transactions pick up as buyers are deterred by a collapse of global investor confidence after the US sovereign-rating downgrade and Europe's debt problems, Buggle Lau, chief analyst at Midland, said in an e-mailed filing last Sunday.
"The bidding sentiment was rather poor; there was little interest in bidding today," said G.M. Ross, the auctioneer and deputy director of the Lands Department.
The government will consider yesterday's auction result for land it plans to sell in the future, Ross said, declining to give details. The government has sold 14 parcels via auctions or tenders during this fiscal year, which began in April, versus 17 sites in the last financial year, according to the department's website.
A group including Kerry Properties Ltd and Sino Land Co bought the land in Sha Tin district on the first bid for HK$5.5 billion (US$704 million), below the HK$8.25 billion median estimate of five in a Bloomberg News survey. Transactions of used apartments at the 10 biggest private projects in Hong Kong fell over the weekend from a week earlier as buyers were deterred by concerns the US's loss of its top credit rating will extend equity declines.
The government accelerated land sales this fiscal year in a bid to stem a more than 70 percent gain in home prices since the beginning of 2009.
"The surprising price shows developers' long-term concerns under financial turmoil," according to Hong Kong-based Yu Kam-hung, the senior managing director at CB Richard Ellis Group Inc. "I expect a 20 percent price downturn in the coming two years."
The threat of more government curbs, and rising mortgage rates, drove the number of home deals in the city to a 30-month low in July.
Transactions of used apartments at the 10 biggest private projects fell to 24 over the weekend from 31 a week ago, according to Midland Holdings Ltd, the biggest publicly traded real estate agent in the city. Home prices may drop 5 percent to 7 percent before transactions pick up as buyers are deterred by a collapse of global investor confidence after the US sovereign-rating downgrade and Europe's debt problems, Buggle Lau, chief analyst at Midland, said in an e-mailed filing last Sunday.
"The bidding sentiment was rather poor; there was little interest in bidding today," said G.M. Ross, the auctioneer and deputy director of the Lands Department.
The government will consider yesterday's auction result for land it plans to sell in the future, Ross said, declining to give details. The government has sold 14 parcels via auctions or tenders during this fiscal year, which began in April, versus 17 sites in the last financial year, according to the department's website.
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