Far East Consortium International has amassed HK$20 billion for its return to the Hong Kong property market as an increase in land supply for housing provides more opportunities for the mid-sized developer. "We have not participated in Hong Kong land sales for the past 10 years until recently. With sufficient cash reserves on hand, we will be more active in building up the land bank in the city," said chairman David Chiu. The remarks came after the firm reported a record net profit of HK$914 million for the year to March due to strong property sales from overseas markets including Singapore, Shanghai and Melbourne. It secured two small residential sites in Sha Tau Kok and Tai Wai, Sha Tin at a government tender for HK$291 million. In October, the company won Sha Tau Kok for HK$143 million, or HK$1,195 per square foot. Six months later, Far East won the bid for Tai Wai, for HK$148 million or HK$3,336 per sq ft. Chiu said the firm plans to spend about HK$10 billion for land acquisitions, while the remaining HK$10 billion would be used to finance construction once the projects get off the ground. With land prices continuing to decline, he expects the project in Sha Tau Kok could post a profit margin of 50 per cent if Far East can offer the flats at HK$6,000 per sq ft in the future. "The site offers a great opportunity for us although it is small and in a remote area. But we see the area having strong pent-up demand as there has been no new supply in the Sha Tau Kok housing market in the past 10 years," he said. Hong Kong Mortgage Corporation (HKMC) should relax mortgage lending in order to help increase home ownership for young people, he added. At present, buyers for flats below HK$4.5 million could receive mortgage loans up to 90 per cent of the flat's value, capping it at HK$3.6 million, while the maximum loan-to-value ratio (LTV) is 80 per cent, or capped at HK$4.8 million for flats worth at or above HK$4.5 to HK$6 million. "Developers will not mind selling projects at competitive prices once we can achieve higher sales volume to compensate for the lower margins," Chiu said.