Sha Tin land prices down 18pc in two weeks
A tender for a luxury residential site in Sha Tin's Kau To has fetched 18 per cent less per square foot than an adjacent site sold two weeks ago, the Lands Department said yesterday.
It shows developers are pessimistic about the market's outlook under the influence of the government's cooling measures, particularly in the luxury residential market, said Alnwick Chan Chi-hing, head of valuation and professional services at property consultant Knight Frank.
The department said the Kau To site had been sold to the consortium of Paliburg Holdings and Regal Hotels International for HK$2.39 billion or HK$6,837 per square foot.
The adjacent site was sold to the consortium of Kingboard Chemical Holdings and Chun Wo Development for HK$2.71 billion or HK$8,382 per square foot this month. Because that price was at the lower end of market expectations, surveyors had cut their expectations for the new site by more than 10 per cent.
However, the land price was 18 per cent less than the adjacent site and at least 9 per cent less than market expectations.
"Despite the higher development density of the new site, the price difference should not be that much," said Vincent Cheung Kiu-cho, greater China director at Cushman & Wakefield.
Chan said: "The poor response is due to the cooling measures, which have affected the luxury market the most. Foreigners and investors have been kept away from buying flats. Now the poor tender result will make home seekers hold their buying plans and wait for a fall in property prices."
He said he expected land prices would drop by double-digit percentages in the coming 12 months, with an even sharper drop for property prices.
The 188,112 sq ft site could yield a maximum floor area of 349,550 sq ft.
Meanwhile, Sino Land has acquired a small site in Wan Chai for HK$139.9 million, or HK$12,497 per square foot, 27 per cent higher than expectations.
Cheung said the better-than-expected result reflected the fact that developers believed the small amount of investment required would help to attract more bidders.
The 2,239 sq ft site could be used to build a 12-storey residential building with a total gross floor area of 11,195 sq ft.