Ho Man Tin sale stokes bullish sentiment among developers and surveyors

The latest land auction, which fetched a substantially above-consensus bid price for the Ho Man Tin site Tuesday, has added steam to the real estate market, with developers rushing to launch projects for sale at higher prices and surveyors becoming more bullish about the luxury home market.

Cheung Kong (Holding) said it will soon relaunch for sale two duplex apartments in its "Celestial Heights Phase 2" residential project in Ho Man Tin District. The new selling price is set at HK$32,000 per square foot of gross floor area, which represents a price hike of 6 percent over the initial launch price. It will also relaunch for sale 14 ordinary apartments in the project at HK$12,600 per square foot, which will match the accommodation value of the plot sold in Tuesday's land auction.

The Ho Man Tin site, which can produce a total gross floor area of 869,000 square feet, was sold at the HK$10.9 billion bid, translating into an accommodation value of HK$12,539 per square foot.

Meanwhile, another blue-chip property developer, Henderson Land Development Co, said it plans to launch for sale next week 30 luxury flats in its new development project, "The Beverly Hills Phase 3", in the Tai Po District. The developer also said it will gauge the situation of the local property market to decide whether it will also put on the market inventory flats in its "The Beverly Hills Phase 1" project.

Chiu Kwok Hung, executive director of Cheung Kong (Holdings), said that the result of the Tuesday land auction is significant for the property market in the Ho Man Tin District, demonstrating that the developers are bullish on the local luxury flat market.

Chiu said that Cheung Kong (Holdings) tried hard to bid for the Ho Man Tin land site, but failed to bag it. He added that the company is interested in the Mount Nicholson Road land parcel, which will be auctioned off by the government next month, and will try hard to successfully bid for it.

As local property developers are bullish on the upscale home market, so are surveyors at property consultant firm Debenham Tie Leung, who predict a 5 to 10 percent rise in luxury home prices in the second half of this year.

They believe the Tuesday auction will add steam to this market, and expect that this luxury market segment will fare better than the mass market, which is expected to rise by 5 percent at most in the second half.

Financial Secretary John Tsang was the first top government official to comment on Tuesday's land auction result.

"The result of Tuesday's land auction reflects current market sentiment. The government will continue to monitor the situation in the property market and will put up more land for sale if there is demand," Tsang said.

Once again, he advised home buyers to be "prudent" in making their home-purchase decision.

China Daily

(HK Edition 06/10/2010 page3)