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HK auctions site at top end of estimates
Source: Bloomberg News |
April 28, 2011, Thursday
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HONG Kong's government yesterday sold a residential building site at the top end of estimates in its first auction since imposing the toughest measures yet to curb home prices in November.
The HK$1.525 billion (US$196 million) for the site in the Hung Hom district is equivalent to gross buildable area of HK$9,934 a square foot, according to Centaline Property Agency Ltd. The estimates for the land close to the site of the city's former airport ranged from HK$1.07 billion to HK$1.53 billion, according to five surveyors and analysts surveyed by Bloomberg. Closely held Nan Fung Development Ltd made the winning bid.
Housing prices in the city, ranked the world's most expensive place to buy a home by Savills Plc, have gained more than 65 percent in the past two years on record-low mortgage rates and an influx of buyers from the Chinese mainland. The government in November increased property transaction taxes and pledged to boost land supply amid public protest that housing prices are becoming unaffordable and as the central bank warned about the risk of a "credit-fueled property bubble."
"This is reasonable and shows most developers believe the market has already digested the latest measures to curb prices and are confident prices will remain solid," James Cheung, a director at the surveyor unit of Centaline, the city's biggest closely held realtor, said.
The estimated selling price for the units on the site is HK$12,934 per square foot, according to estimates from Centaline.
Nan Fung will develop the site in a 50-50 joint venture with Wing Tai Properties Ltd, Nan Fung Managing Director Donald Choi said after the auction. The project will cost HK$500 million to HK$600 million to build, he added, declining to give an estimate for the selling price.
The developers will build more than 100 three to four bedroom luxury apartments, Choi said.
"The bidders are being positive in the way that they are bidding; they are not holding back," Lands Department Deputy Director Graham Martin Ross said after the auction. "The result is well within the expectations but toward the upper end. It shows strong interest for this type of property."
Home prices rose 0.6 percent in the week ended April 17, halting a three-week, 1.6 percent-slide since mid-March when some of the city's biggest lenders raised mortgage terms based on the Hong Kong Interbank Offered Rate, according to an index compiled by Centaline.
The HK$1.525 billion (US$196 million) for the site in the Hung Hom district is equivalent to gross buildable area of HK$9,934 a square foot, according to Centaline Property Agency Ltd. The estimates for the land close to the site of the city's former airport ranged from HK$1.07 billion to HK$1.53 billion, according to five surveyors and analysts surveyed by Bloomberg. Closely held Nan Fung Development Ltd made the winning bid.
Housing prices in the city, ranked the world's most expensive place to buy a home by Savills Plc, have gained more than 65 percent in the past two years on record-low mortgage rates and an influx of buyers from the Chinese mainland. The government in November increased property transaction taxes and pledged to boost land supply amid public protest that housing prices are becoming unaffordable and as the central bank warned about the risk of a "credit-fueled property bubble."
"This is reasonable and shows most developers believe the market has already digested the latest measures to curb prices and are confident prices will remain solid," James Cheung, a director at the surveyor unit of Centaline, the city's biggest closely held realtor, said.
The estimated selling price for the units on the site is HK$12,934 per square foot, according to estimates from Centaline.
Nan Fung will develop the site in a 50-50 joint venture with Wing Tai Properties Ltd, Nan Fung Managing Director Donald Choi said after the auction. The project will cost HK$500 million to HK$600 million to build, he added, declining to give an estimate for the selling price.
The developers will build more than 100 three to four bedroom luxury apartments, Choi said.
"The bidders are being positive in the way that they are bidding; they are not holding back," Lands Department Deputy Director Graham Martin Ross said after the auction. "The result is well within the expectations but toward the upper end. It shows strong interest for this type of property."
Home prices rose 0.6 percent in the week ended April 17, halting a three-week, 1.6 percent-slide since mid-March when some of the city's biggest lenders raised mortgage terms based on the Hong Kong Interbank Offered Rate, according to an index compiled by Centaline.
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