First land sale for nano flats in Tuen Mun failed to take off because of market woes and site’s constraints, not minimum size imposed: analysts
- Authorities on Tuesday rejected all five bids for site in Tai Lam, which would have yielded an estimated 2,020 homes
- Real estate association argues not all developers could afford the price, while analysts point to potential hike in interest rates and pandemic
The first plot of land earmarked for residential flats that must be at least 280 sq ft has failed to attract bids not because of the government’s new minimum size requirement but rather due to the site’s constraints and prevailing market uncertainties in Hong Kong, analysts have told the Post.
The large site in Tuen Mun was viewed as a gauge of the industry’s response to the government’s drive to stop the proliferation of shoebox homes, known as “nano flats”.
Authorities on Tuesday rejected all five bids for the residential site in Tai Lam, which would have yielded an estimated 2,020 homes, after all tenders were below the reserve price.
But real estate professors and market analysts said the minimum size rule was unlikely to have dissuaded developers from making successful bids.
Vincent Cheung, managing director of Vincorn Consulting and Appraisal, said the total investment for the project could be HK$15 billion (US$1.9 billion) including an estimated land cost of HK$8 billion.
“Developers will be less aggressive as it will increase the investment risk in an area with limited infrastructure considering the current market condition,” he said.
