The number of construction starts on new flats in Hong Kong dropped 24.5 per cent year on year in the first half of this year, even though the government has increased the supply of land in recent years.
A tender for a residential site in Sha Tin's Kau To attracted 11 bidders yesterday, less than the 14 bids received by another Kau To site in March.
Property analysts said that reflected a slowdown in development owing to the poor outlook for the property market.
Transport and Housing Bureau data released yesterday showed construction work began on 6,600 new flats in the second quarter, compared with just 1,100 in the first quarter.
Work started on 10,200 new flats in the first half of last year.
The Rating and Valuation Department forecasts 13,550 flats to be completed this year, but only 1,500 were completed in the first half - 34.78 per cent less than the same period last year.
"The government released new cooling measures such as double stamp duty in the first half," said Professor Eddie Hui Chi-man, from the department of building and real estate at Polytechnic University.
"The market was also clouded by the United States Federal Reserve's reduction plan in its monetary stimulus. It made developers slow down on construction.
"Developers' construction work will depend on the sales of new residential projects. As the sales of new homes are not active, developers will not speed up the development process.
"The units that have started construction will still be less than 20,000 this year and it will not improve until the end of 2014," added Hui.
Government figures show that there will be 70,000 flats available for sale, including flats from sites where construction has yet to start, in the next three to four years - the most in six years.
The 125,142 square foot site in Kau To attracted bids from developers including Cheung Kong (Holdings), Sino Land, a joint venture between Wing Tai Properties and Manhattan Group, Wheelock Properties, HKR International, K Wah International and a consortium of Wang On and Early Light International. Paliburg Holdings also teamed up with Regal Hotels International to join the bidding.
Surveyors estimated the site was likely to fetch bids ranging from HK$1.21 billion to HK$1.43 billion, or HK$9,000 to HK$10,600 per square foot.
Another residential site in Tuen Mun's So Kwun Wat received nine bids, with developers including K Wah, Sino Land, Cheung Kong, Wing Tai and the consortium of Paliburg and Regal Hotels joining the bidding.
The valuations for the site range between HK$478 million and HK$740 million, or HK$3,000 and HK$4,643 per square foot. The 125,142 sq ft site located at Tuen Mun Road could yield a total gross floor area of 159,372 sq ft.