Hong Kong property developers might pay HK$8.41 billion (S$1.5 billion) for a residential site at a government auction, as some property analysts reduce their estimates following a decrease in apartment prices in the past two weeks, as well as the missed forecasts on two previous land sales.
Estimates for the residential site located in Ho Man Tin district will range from HK$7.15 billion to HK$9.8 billion, according to seven analysts. Three of them had either cut their estimates for the last two weeks or waited long enough before publishing their forecasts.
The Centa-City Index fell 1.44 percent last week, the biggest weekly drop in over 18 months, during the government’s May 12 pledge to boost land supply as it tries to cool down the real estate market. Hong Kong may add nearly 60,000 residential units over the next three to four years, said Financial Secretary John Tsang.
“We expect developers to be quite cautious at this auction,” said James Cheung, Centaline Properties Ltd’s surveyor unit director. “On the other hand, this is a quality site and after sitting on the sideline at the last two auctions, some of the big players may be ready to move in again.”
Since end-2008, home prices in the city-state have increased 41 percent, spurring concerns that housing units are becoming out of reach for ordinary residents.