No ceilings in sight on Discovery Bay home prices

RECORDS are being broken time and time again for home prices in Discovery Bay.

High-rise units with sea view have recently been selling on the secondary market for as much as $4,900 a square foot - up 22.5 per cent in just three months.

And the average sale price for garden houses has now hit more than $5,200 a square foot, according to HKR International.

New garden houses in Bijou Hamlet were recently pre-sold at more than $6,000 a square foot, serving as a fairly good indicator of just how high prices on the island could possibly reach.

''Even though Bijou Hamlet was pre-sold at a new record price, the development was over-subscribed by more than 25 times, indicating strong potential for further increases in Discovery Bay property prices,'' said Vivian Sze of Discovery Bay Agency, a wholly owned HKR subsidiary.

The success of the Bijou Hamlet pre-sale spurred a ''drastic'' pick-up in transactions in the resale market in Discovery Bay in following days, she said.

In the rental market, the vacancy rate remains low, resulting in steady rent increases. High-rise units are fetching between $18 and $23 a square foot, while rents for garden houses and low-rise units range from $22 to $30 a square foot.

Ms Sze said the outstanding performance of the property market in Discovery Bay could be attributed to several internal and external factors.

''Firstly, the record-setting land sale of the Mount Parker site at the end of last year has spurred strong market recovery, resulting in active investments,'' she said.

''Additionally, the response to the launch of Discovery Bay's La Vista and Bijou Hamlet in January was very encouraging.

''The launch of La Vista set a record for the district by being more than 40 times over-subscribed.'' Buying has been to some extent speculative, given that HKR says it is close to winning agreement from the Government to build a short tunnel linking Discovery Bay with the new North Lantau highway system that will connect with the new airport at Chek LapKok.

Should HKR win this concession, analysts expect prices to soar.

CITIC Pacific's recent acquisition of a 50 per cent stake in Discovery Bay from HKR for $3.4 billion has also prompted the market to reassess the further development potential of the island new town.