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February 23, 2010

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Home » Business » Real Estate

No slowdown in HK housing market

SUN Hung Kai Properties yesterday won the bidding for a government-auctioned residential site in Hong Kong for HK$3.37 billion (US$432 million), well ahead of consensus, in a sign the city's housing market is showing no signs of slowing down.

Property prices in Hong Kong surged by nearly 30 percent last year, and by even more in the luxury sector where they now top peaks reached in 1997 before the Asia financial crisis.

Encouraged by the auction results, investors bid up shares in Sun Hung Kai, the city's largest property developer, to an intra-day high of HK$102.70 before the stock closed at HK$102.30, up 2.2 percent.

A spokeswoman for Sun Hung Kai said the company won the land auction after it reported strong apartment sales over the weekend.

Rapidly rising land and housing prices have triggered concerns Hong Kong may join other Asian countries to introduce further measures to prevent the forming of an asset bubble.

The government may announce a rise in stamp duty on luxury home transactions during the financial secretary's budget speech tomorrow, local media have reported.

Adrian Ngan, an analyst at CCBI, said the Tseung Kwan O site, in Hong Kong's northeastern New Territories area, sold at a reasonable price though at the high end of market expectations.

The price tag for the residential site with a gross floor area of 67,680 square meters was two-thirds above the government's initial asking price of HK$2.0 billion and 20 percent higher than an average forecast of HK$2.8 billion from six analysts polled by Reuters.

"For the whole broad market, Tseung Kwan O supplies about 80 to 90 percent of the inventory at the moment," said Alfred Chan, chief dealer at Cheer Pearl Investments.


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