Sat, Dec 29, 2018 - Page 10 News List

Discount on Hong Kong land points to declining market

Bloomberg

One of Hong Kong’s biggest sales of residential land this year added to the picture of a worsening home market.

China Overseas Land & Investment Ltd (中國海外發展) won the site in Kai Tak on Thursday with a bid of HK$145,560 (US$18,584) per square meter of floor area. That is 13 percent less than Goldin Group (高銀集團) paid last month for a nearby parcel.

“The number of bids drawn this time was small, and that has to do with the current market situation,” Centaline Surveyors Ltd (中原測量師行) senior associate director James Cheung (張競達) said.

Homes on the site would lack good views, another factor capping the price, he said.

Hong Kong’s home prices are sliding and land sales have had a rough year after a record-breaking previous year.

Goldman Sachs Group Inc forecast a 15 to 20 percent decline in property prices over two years as interest rates in the territory rise in tandem with the US.

The Kai Tak site can yield 54,813m2 of floor area, making it the second-biggest residential land sale by area this year.

China Overseas Land is paying HK$8 billion.

The value of land parcels sold by the government this year stands at HK$80 billion, down by 37 percent from last year, data compiled by Bloomberg showed.

In October, the government failed to sell a residential site in Hong Kong’s exclusive Peak neighborhood.

So far, home prices have dropped 7 percent from an August high.

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