Hong Kong has received a HK$2.876 billion (S$509 million) opening bid in an auction for a residential site, making it the first land sale in Hong Kong since the government implemented measures to crack down speculations in the housing market.
Property prices in Hong Kong have increased by about a third since January 2009, triggered by the low housing supply, low home loan interest rates and the influx of foreign capital into HK’s property market.
However, just before the auction, several analysts revised their forecasts for the residential site by ten percent lower, as the market sentiment was affected by recent developments in the global credit crunch, as well as the government’s measures to cool down housing prices and prevent an asset bubble formation.
According to nine analysts questioned, the residential site for sale is expected to add HK$4.55 billion into the government’s funds.