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Hong Kong property: plot of land for flats in Kennedy Town fetches just 6 bids as high interest rates, market gloom deter developers
- The site at the junction of Sai Ning Street and Victoria Road, expected to yield 450 flats, drew far fewer bids than expected
- The anticipated lengthy development period for the site may also have deterred potential bidders, analysts said
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The first government land tender of this financial year ended up attracting far fewer bids than expected as the prospect of further interest rate hikes and new housing supply dimmed the outlook for Hong Kong’s property market.
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The tender for the site at the junction of Sai Ning Street and Victoria Road in Kennedy Town fetched just six bids on Friday, according to the Lands Department. The land, on the western side of Hong Kong Island, is expected to yield about 450 flats, some with a sea view.
Alex Leung, senior director at CHFT Advisory and Appraisal, had expected somewhere between 12 and 15 bids.
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“I considered the land in Kennedy Town a rare opportunity as it is an urban area. The scale is also optimal and fits medium to large-scale developers,” said Leung. “Obviously, I was over-optimistic. Developers are far more conservative than they were a few months ago.”
The construction of a temporary bus terminal next to the site while the existing one on the plot is replaced by a new one will prolong the development period, and this might have deterred some potential bidders, Leung said. The high interest rate environment makes the long development time frame more unpalatable because it will increase the cost of the project.
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