Two residential sites in Kai Tak attracted an overwhelming response of 29 bids from developers yesterday despite the proposed developments only being available to Hong Kong buyers.
The smaller of the sites attracted 16 bids in a tender, while 13 developers joined the bidding for the larger, adjacent site, according to the Lands Department.
The tender is the first under the "Hong Kong property for Hong Kong people" scheme. Surveyors estimate they could fetch HK$3.96 billion to HK$4.4 billion, or HK$4,500 to HK$5,000 per square foot.
"Developers are interested in the sites as the location is good. The sites are close to the future Kai Tak MTR station on the Sha Tin-Central Link," said Vincent Cheung Kiu-cho, national director for Greater China at consultancy Cushman & Wakefield. "This offsets the negative impact of the restrictions."
The government launched the scheme in an attempt to meet the demand of local people, who have been priced out of the market. It is part of its plan to cool the property market. It overlaps the buyer's stamp duty introduced to keep many foreigners and mainlanders away from buying property in Hong Kong.
Economist Kwan Cheuk-chiu said the competitive bidding for the Kai Tak sites would lead to them being sold at a high price. "Developers have a keen interest in the sites as they have a sea view and are close to Kai Tak Cruise Terminal," he said.
Despite the flats being limited to Hong Kong people only, the prices may only be 5 per cent lower than the flats without this restriction.
"It won't be cheap and only rich Hong Kong people could afford it," he said. Kwan sug- gested the government should introduce the scheme in more affordable New Territories districts.
"It would not be effective in meeting the housing demand of middle-class or first-time buyers if the sites are located in prime locations," he said.
Kwan said the government should allocate 30 per cent of the sites under the programme in the New Territories' new districts. "It won't help if there are only a few residential blocks under the scheme," he said.
Lawmaker Wong Kwok-hing said the government should release more sites under the scheme.
Developers such as Cheung Kong (Holdings); Nan Fung Development; a consortium formed by Chun Wo Development; a joint venture of Paliburg Holdings and Regal Hotel International; Chinachem Group; Sun Hung Kai Properties; Emperor International; Wheelock Properties; Sino Land; a consortium of New World Development, Lai Sun Development and Glorious Sun Enterprises; K Wah International; Wing Tai Properties; Henderson Land; and China Overseas Land and Investment all joined in to make bids for the smaller site.
These developers also submitted bids for the adjacent site, except Emperor International and Chun Wo Development.
The smaller site covers an area of 83,647 square feet, which could yield a total gross floor area of 418,235 sq ft. The other site has an area of 92,409 sq ft and could provide a total gross floor area of 462,045 sq ft.