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  • Dec 20, 2014
  • Updated: 8:32am
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Developers race homes onto market to fund land rush

PUBLISHED : Thursday, 04 October, 2012, 12:00am
UPDATED : Thursday, 04 October, 2012, 3:10am

Hong Kong developers, seeking funds to tap an expanding government land supply, are this month preparing to sell the most homes in six years as expectations for prolonged low interest rates fuel demand.

Real estate companies led by New World Development, this year's best performer in the benchmark property gauge, may sell more than 3,300 units from eight new projects in October, according to Buggle Lau, chief analyst at Midland Holdings, the city's biggest publicly traded realtor. That would be the highest monthly figure since August 2006, Lau said.

Chief Executive Leung Chun-ying has expanded property curbs initiated by his predecessor, including boosting home supply and raising mortgage downpayment requirements, to rein in an asset bubble. Home prices have surged almost 90 per cent since early 2009 on a shortage of new supply and an influx of mainland buyers.

"We have a combination of a red-hot market and a government trying to make more units available to buyers quicker," said Wong Leung-sing, an associate director of research at Centaline Property Agency. "Of course, developers are rushing in."

The value of property transactions in the city rose 1 per cent in September from a month earlier to HK$54.7 billion ($7.1 billion), the highest since May, according to Centaline.

Property companies, the best-performing sub-group in the Hang Seng Index this year, might have sold as many as 7,000 homes in the last quarter, bringing the year's total to more than 15,000 units for sales of HK$150 billion, Wong said. That compared with about 9,100 units for HK$108 billion in 2011, he said.

More than 2,500 units from The Reach, a joint project by New World and Henderson Land Development may go on sale this month, according to Midland. Cheung Kong (Holdings) will probably sell more than 300 units from two new projects, the realtor said. Other builders with new projects going on sale include Sino Land and China Overseas Land & Investment, the Hong Kong-traded developing arm of the construction ministry.

The Hang Seng Property Index has risen 29 per cent this year, compared with the 13 per cent advance in the Hang Seng Index. The real estate gauge gained 0.6 per cent yesterday.

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