Analysts slash forecasts on old Hong Kong airport land tender as chill descends on local property market
- New residential Kai Tak land tender will fetch substantially less than full sea view site sold in May
- Leading property consultancies estimate price drop ranging from 10 to 33 per cent
A residential plot to be tendered on the old runway at Kai Tak could fetch bids 10 to 33 per cent lower than sales that took place in May, as the escalation of the US-China trade war sends a sudden chill through the city’s property market after hitting a record last week.
The site, located at area 4A site 1, has a limited view of Victoria Harbour and can yield 1.08 million sq ft of gross floor area. The land tender will close on July 19.
“The uncertainties brought by the trade war have damaged developers’ appetite [for the site] as eventually it will affect sales in the future and that will result in higher holding costs,” Thomas Lam, executive director at real estate consultancy Knight Frank, said.
Colliers International head of valuation and advisory Hannah Jeong offered up one of the most bearish forecasts, estimating the site will fetch HK$14,000 per square foot (US$1,785.45), or about 30 per cent lower than area 4C site 2, a full sea view plot which sold in May HK$19,636 per square foot.
Pruden Group analyst Leo Cheung Sing-din estimated the site will fetch HK$13,000 per square foot, while Knight Frank forecast a range of HK$16,500 to HK$17,500 per square foot. Vincorn Consulting and Appraisal said the site is likely to sell within a range of HK$15,000 to HK$16,000 per square foot.
Centaline Property Agency said that the trade war was starting to leave its mark on the local property market. The Centa-City Leading Index, a broad gauge of weekly changes in prices for lived-in homes, fell 0.25 per cent to 188.95 for the week ending June 2, after hitting a record at the end of May.