HK land prices rocket as developers return to acquisition spree
Three recent plots sold for 20 to 35 per cent premium as sentiment returned to the residential market
Hong Kong land prices have surged in the past two months as local major developers returned to land acquisition at an aggressive pace amid brisk sales at new projects.
Sun Hung Kai Properties (SHKP), Sino Land and Hong Kong Ferry (Holdings), which is 33.4 per cent owned by Henderson Land Development, have snapped up three residential sites in government tenders since July, compared with two plots sold to local big players in the whole of 2014 and 2015.
The latest three sites were sold for 20 per cent to 35 per cent above market expectation, in stark contrast to previous plots sold at below-market rates.
Thomas Lam, head of valuation and consultancy at Knight Frank, said the premium paid recently by local developers was due to an improvement in market sentiment.
“The positive land sale outcome is likely encouraged by the reduction in market uncertainties,” he said.
Home-buying confidence has been on the rise in view of the US Federal Reserve’s uncertain time frame for an interest rate hike, while Britain’s vote to leave the European Union has had a minimal impact on the market, Lam said.
On August 8, Hong Kong Ferry teamed up with Walter Kwok Ping-sheung, the former chairman of Sun Hung Kai Properties, to secure a plot at Castle Peak Bay, Tuen Mun, for HK$2.7 billion. The HK$4,085 per square foot price tag represents a 20 per cent premium on the high end of market expectations and is 22 per cent above what Wing Tai Properties paid for a site in the same area in June.