Hong Kong developers raise prices of flats by up to 70 per cent as record Kai Tak land sale boosts confidence
Analysts say the surge has been fuelled by a land auction at the site of the city’s former airport which fetched HK$25.16 billion, a record price for a residential plot
Hong Kong developers are raising the prices of their unsold units by as much as 70 per cent in a sign that the world’s hottest property market is a long way from running out of steam.
Kerry Properties has priced a flat at The Bloomsway in Tuen Mun at HK$16.14 million (US$2 million), or HK$18,724 per square foot, up 68 per cent from two years ago, while a 964-square foot unit at K. Wah International’s K. City, in Kai Tak, has increased 13 per cent from when it first went on the market in March 2017.
Analysts said the surge has been fuelled by a recent land auction which fetched HK$25.16 billion (US$3.21 billion), a record price for a residential plot. Sun Hung Kai Properties paid HK$17,776 per square foot for the parcel in Kai Tak, the site of the city’s former airport, which means an apartment complex built on the site may fetch at least HK$32,000 per square foot.
“We call it a benchmark impact, and it is based on the location, the large size [of the plot] and the developer,” said Sammy Po Siu-ming, chief executive of Midland Realty’s residential division. “It is not a mainland company making a bid, which would have brought doubt about whether it is just speculation. It is Sun Hung Kai, a traditional, big local developer. People think that Sun Hung Kai’s big investment means the company has belief in a continued increase in the city’s property prices.”
Records on the government’s website show that 23 developers have either released new units for sale or revised the prices of ones already on the market since May 15, when the historic Kai Tak deal was made.
