Unpopular Hong Kong land sites may test new lows with MTR Tin Wing tender
Third attempt at tender for MTR's Tin Wing rail site will gauge appetite of developers for new land plots before expected spike in flat supply
Land prices in less popular locations might tumble to fresh lows, market watchers warn, given the likelihood of a spike in new flat supply to a four-year high and an uptrend in interest rates.
The upcoming tender of a large site at the MTR Corp's Tin Wing Light Rail Terminus in Tin Shui Wai - viewed less favourably than sites on other railway lines - will be a test of developers' appetite for new sites before a flood of new land releases in the Northwestern New Territories.
"Location, location and location are key determinants for land value as it will affect the flat prices when they are offered for sale in future," said James Cheung, a director at Centaline Surveyors. "It would not be surprising to see this land parcel at Tin Wing station set a record low price."
In October, MTR Corp awarded the 2,900-unit residential portion of the Tai Wai Station project to New World Development for HK$1,393 per square foot, the lowest price in terms of land value per square foot for a project along the subway line in the past three years.
"The site at Tin Wing Light Rail Terminus may go for even lower than that level, given its remote location," Cheung said.
Developers would avoid submitting aggressive bids in high-risk areas that would see a large supply of new flats in the future, he said.
The 1,500 unit site, being released for tender for a third time, is in Yuen Long district where 4,800 new flats are in the pipeline this year, accounting for 50 per cent of the total new supply in the New Territories.