15 per cent stamp duty
To rein in the city's runaway housing prices, Hong Kong's Financial Secretary John Tsang Chun-wah announced an additional 15 per cent stamp duty on non-permanent-resident and corporate buyers starting from October 27, 2012. The move prompted speculation over the effectiveness of taxation on the real estate market and criticisms that Hong Kong was turning away from its roots as a free market economy in favour of a more protectionist market environment.
New stamp duties fail to deter 16 bids in two residential land block tenders
Government tenders for two housing sites attract at a total of 16 bids each before closing
Developers do not appear to have been put off from buying land by the latest measures aimed at cooling the property market.
The government received at least seven bids for each of two housing sites for which tendering closed yesterday.
A site near the Tseung Kwan O MTR Station that can yield a total gross floor area of 563,300 sq ft drew seven bids, the Development Bureau said yesterday.
Another site, in Lok Wo Sha, Sha Tin, with a potential gross floor area of 562,000 sq ft, attracted nine bidders.
"It seems the new tightening measures have not had much impact on developers' buying sentiment, but we will need to see the prices they bid," said Ringo Lam Chun-chiu, director for valuation at A.G. Wilkinson & Associates.
These were the first land sales by the government after it introduced a buyer stamp duty on non-permanent residents and companies last Friday and increased and extended the special stamp duty on flat sales to curb soaring home prices.
Cheung Kong, New World Development and Wheelock Properties bid for both sites.
"The good response is due to a lack of investment channels for developers and investors, particularly when the global economy is not good," Vincent Cheung Kiu-cho, property consultancy Cushman & Wakefield's national director for valuation, said. "Local demand is still high amid a low-interest-rate environment."
Although surveyors said the number of bidders had exceeded their expectations, some revised downwards their valuations of the two sites by up to 10 per cent.
The Tseung Kwan O site is now expected to fetch HK$2.3 billion to HK$2.648 billion, equating to HK$4,083 to HK$4,700 per buildable square foot, according to six property consultancy firms surveyed by the South China Morning Post. The Lok Wo Sha site is expected to fetch HK$2.22 billion to HK$2.76 billion, or HK$3,949 to HK$4,910 per sq ft.
Centaline Property Agency's Centa-City Leading Index, which tracks changes in home prices in the secondary market, has set a new high for six consecutive weeks and closed at 114.35 for the week from October 8-14.