Mood mixed after land sale bidding

PUBLISHED : Saturday, 04 February, 2012, 12:00am
UPDATED : Saturday, 04 February, 2012, 12:00am


The property market is receiving mixed signals amid growing interest in secondary transactions and predictions that bids for a residential plot in Tuen Mun were unlikely to be aggressive because of medium-term uncertainty for the sector.

Seven bids were received by yesterday's deadline for tendering on the site- more than analysts had expected. However, they said the offers were likely to be low as this would be a bumpy year for home sales.

The tender came a day after the government announced that it would make less land available for sale this year.

The site had been expected to fetch between HK$3.1 billion to HK$3.76 billion.

However, the mood in the secondary housing market appeared more upbeat.

Agents said they had noted a sharp increase in the number of viewing appointments for secondhand flats. They also expected deals to start picking up this month after sales of flats fell 19.8 per cent to 4,490 last month from December.

'There were no tough housing measures announced by Financial Secretary John Tsang in his latest budget and that's good news for the market,' said Louis Chan, managing director (residential) of Asia-Pacific at Centaline Property Agency.

Agents said buyers in the secondary market had also welcomed the government's cut in land sales as it would improve the prices of their property when they move on.

'Sentiment has been improving since the government announced that fewer land sites would be available for sale in this year's land sales programme. More clients have asked to make appointments to view flats and I believe some of them will buy in the next few days,' said Patrick Tsang, a senior sales manager at Centaline's Taikoo Shing branch.

Midland Realty said it had scheduled 1,385 viewings at 15 big housing estates this weekend, an 18.4 per cent increase from a week ago.

Surveyor Albert So Chun-hin agreed that the government's plan was partly responsible for the number of bids made on the Tuen Mun site.

Yesterday's tender centred on a 722,770 square foot site at Castle Peak Road in Tuen Mun's So Kwun Wat. It attracted bids from Cheung Kong, Sun Hung Kai Properties, Henderson Land, New World Development, Sino Land, Kerry Properties and China Overseas.

Analysts had expected that only four to five developers would submit tenders.

'We can see from the new land sales application list that there will be fewer luxury sites available in the market in future. The Tuen Mun site has the potential to be developed into a luxury residential project. That's why it attracted so many developers,' So said.

Vincent Cheung Kiu-cho, national director of valuation advisory services at property broker Cushman & Wakefield, said the developers would submit conservative bids.

The government released the site - which is near Cafeteria New Beach and the Gold Coast Hotel - for tender in December last year. Under the land lease, the developer must build at least 1,100 flats on a total gross floor area of 939,600 sq ft.

Meanwhile, the Urban Renewal Authority's redevelopment project at Graham Street in Central received 18 expressions of interest yesterday. The first of three phases will cover an area of 18,191 sq ft, which can be developed into a commercial-residential project with a total gross floor area of 19,149 sq ft.

The government's land application sales list for the current financial year contained 52 sites. The latest list, released on Thursday, contains 47 sites for sale.