By Kelvin Wong and Sophie Leung June 8 (Bloomberg) — Hong Kong’s government today sold a residential site for HK$10.9 billion ($1.4 billion) at a public auction , beating estimates and underscoring that efforts to cool the market have not dented demand for luxury homes. The price for the site in Ho Man Tin district is higher than the HK$8.41 billion median estimate of seven analysts surveyed by Bloomberg News. The estimates ranged from HK$7.15 billion to HK$9.8 billion. Sun Hung Kai Properties Ltd. made the winning bid, Cable TV reported. Home prices in the city have risen 41 percent since the end of 2008, prompting the government to tighten down-payment requirements for luxury homes in October to curtail property speculation after record-low interest rates fueled the surge. The Hang Seng Property Index , tracking six of Hong Kong’s biggest developers, jumped as the auction was in progress to close 1.8 percent higher, reversing a 0.1 percent drop. “The above-expectations bidding price shows that the developers hold a positive outlook on urban sites for luxury homes, as currently it is obvious the supply for luxury homes is not sufficient,” Wong Leung-sing, an associate director of research at Centaline Property Agency Ltd. said by phone today. The Centa-City Index , a measure of Hong Kong’s home prices, last week fell 1.44 percent, its biggest weekly drop in more than 18 months, in the wake of the government’s May 12 pledge to keep boosting land supply to cool the property market. Hong Kong may add as many as 60,000 homes in three to four years, Financial Secretary John Tsang said yesterday. Luxury Homes The site in the Kowloon area is the third piece of land auctioned by the government this fiscal year. It has a total area of 16,151-square-meters (174,000 square feet) and building areas of 869,000 square feet. New apartments in the district, which include those at projects such as Cheung Kong (Holdings) Ltd.’s Celestial Heights and New World Development Co.’s Wylie Court, are currently selling for about HK$12,000 to HK$13,000 a square foot, according to Alnwick Chan, executive director at property consultant Knight Frank LLP. Down payments for homes priced above HK$20 million were raised to 40 percent from 30 percent, Hong Kong Monetary Authority Chief Executive Norman Chan said in a statement Oct. 23. Luxury homes in Hong Kong are defined as those costing at least HK$10 million or bigger than 1,000 square feet (93 square meters). To contact the reporters on this story: Kelvin Wong in Hong Kong at kwong40@bloomberg.net
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Hong Kong Site Is Sold for $1.4 Billion to Sun Hung Kai, Beating Estimates
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