Hong Kong's biggest developers are capping the number of flats an individual can buy in some projects to cool speculation, but some say the move is ineffective and derided it as a 'sales gimmick'. In a move to ease concerns greedy speculators are putting property out of the reach of average people, Cheung Kong (Holdings), Sun Hung Kai Properties and Henderson Land Development will implement the restrictions to stop multiple properties at estates being scooped up by one person. Analysts say that by voluntarily implementing the caps, developers may be heading off more heavy-handed intervention by the government, which has already declared it wants to cool the market. Cheung Kong will be the first to implement the cap when it offers 20 units at Festival City in Tai Wai for sale today. The average price of the flats is HK$8,692 per square foot for buyers opting for cash payment. Cheung Kong said earlier that an individual buyer, either using a personal name or that of a company, cannot purchase more than two units at Festival City. Sun Hung Kai Properties, the city's largest developer by market value, and Henderson Land Development will also cap purchases by buyers to one unit at their new projects. The rule will apply to Sun Hung Kai Properties' luxury residential Larvotto project in Ap Lei Chau and Henderson Land's Green Lodge development in Yuen Long. Both projects have yet to go on sale. A Henderson Land spokesman said Green Lodge was a low-density project with only 60 units available and the company was concerned that genuine buyers would not be able to make a purchase. 'We thought that all of them may end up going to investors if we didn't have the cap,' she said. A property agent, who asked not to be named, said the developers' measures were a sales gimmick. 'Investors would use one company to submit offers to buy a number of units before project launches previously. But now, they have to set up more companies to submit offers so as to increase the chance of success,' he said. 'It helps the developers to create a picture of strong market response for their projects.' Paul Louie, regional head of property research at Nomura International, said the government would step in if the developers did not do something to stamp out speculation. 'In a strong demand market, the restriction will not incur much harm to the sales of developers,' he said, adding that making it more difficult for speculators would help cool the market.
