It looks as if the Hong Kong property market is cooling, as the
government recently sold land for less than the estimated value, in
spite of it being in one of the most exclusive areas in the city. The
42,000 ft.² of land is situated near Repulse Bay Road, and was sold
for HK$1.67 billion, although estimates had expected the land to be
sold for HK$1.68 billion.
It's likely low-rise apartments will be built on the site, and
could cost about HK$44,000 a square foot during the next couple of
years, while new units in the area currently cost between HK$35,000
and HK$40,000. Repulse Bay is one of the most exclusive areas in the
city, and is home to some of the richest inhabitants. It was
developed around the site of the Repulse Bay hotel which was built in
the 20s and demolished in the 80s, and which featured in several
famous films.
In July Leung Chun-ying is due to take over as the leader of Hong
Kong, and has already pledged to increase the housing supply in a
city where property is among the most expensive in the world. Since
the beginning of 2009, property prices have increased by more than
78% which is due to a lack of supply and low mortgage rates.
During the first quarter of this year, prices of luxury homes fell
by 2.2% due to mortgage restrictions imposed by the government on
properties costing more than HK$10 million reducing demand. Property
in Hong Kong is around 55% more costly than London.
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