Sep 8, 2010 - PropertyGuru.com.sg
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The sky-rocketing property prices in Hong Kong are believed to have been caused by the short supply of land.However, a report by the South China Morning Post said that six big Hong Kong developers - Henderson Land, Kerry Properties, Sino Land, Sun Hung Kai Properties, New World Development and Cheung Kong Holdings, – are sitting on projects that could yield approximately 43,000 apartments at an average size of 1,000 sq ft.
According to the report, the developers are moving gradually to develop the land, most probably to avoid lowering their assets’ value and flooding the market. This shows the difficulties faced by the government in controlling the rapidly increasing property prices.
“As developers have massive land banks in hand, they have full control of when and at what price level to sell flats,” said Professor Eddie Hui Chi-man of the building and real estate department of Polytechnic University. The situation may soon become similar to that in the mainland China, where the central government is investigating land hoarding by developers, he added.
The Hong Kong government has sold seven sites at auction this year in a bid to cut prices. The 39 remaining sites on the application list of the Land Department which could be launched for sale is equal to a sixth of the combined land hold by the top developers.
In August, the government introduced policies aimed at cooling the market, which includes raising down payment on sales over HK$12 million from 30 percent to 40 percent and prohibiting resales prior to the completion of an initial deal on new flats.
Following the announcement of the cooling measures, apartment sales saw a 50 percent decline over the following weekend, while developer stocks dropped 3 percent to 5 percent. However, the property market heated up once again after Cheung Kong acquired two sites on auction for HK$7.61 billion, which is 30 percent higher than estimates.
