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Thread: HK flat sells at world record

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    Default HK flat sells at world record

    http://www.businesstimes.com.sg/sub/...54688,00.html?

    Published October 15, 2009

    HK flat sells at world record

    Govt may release more land to deflate property bubble: Donald Tsang


    (HONG KONG) Henderson Land Development Co said it sold a Hong Kong apartment at a record price hours after Chief Executive Donald Tsang said the government may release more land to deflate a property bubble.


    Standing tall: A duplex unit on the 68th floor of 39 Conduit Road was sold for a record HK$71,280 psf

    Henderson, controlled by billionaire Lee Shau-kee, sold a duplex unit on the 68th floor of 39 Conduit Road for HK$71,280 (S$12,798) per square foot, and said it may ask HK$100,000 per square foot for two penthouses on the 88th floor of the project.

    Builders completed the fewest apartments since at least 1972 last year. Prices, especially for luxury units, have rallied in 2009 on record-low interest rates and an influx of money from China. The government is Hong Kong's biggest provider of land and has altered supply to support or depress prices.

    'The relatively small number of residential units completed and the record prices attained in certain transactions this year have caused concern about the supply of flats, difficulty in purchasing a home and the possibility of a property bubble,' Mr Tsang said in his annual policy address.

    Mr Tsang, 65, said his administration will closely monitor 'market changes' in coming months, and may direct the Urban Renewal Authority and subway operator MTR Corp, both government-controlled, to bring readily available building sites to market.

    Mr Tsang, Hong Kong's leader since 2005, may be concerned the luxury-market boom will fuel wider price increases, hurting affordability, Centaline Property Agency Ltd. analyst Wong Leung-sing said.

    'He's more concerned whether mass market housing prices would get pulled up by the momentum in the luxury market,' Mr Wong said. 'If that happens it'll become a social issue.' Instead of changing the government's land-sales system, Mr Tsang is more likely to have the MTR speed the sale of suburban land of interest to all big builders, Mr Wong said.

    The city's Hang Seng Property Index, which includes six companies, climbed 1.6 per cent yesterday, taking this year's gain to 66 per cent. The benchmark Hang Seng Index rose 2 per cent and has advanced 52 per cent this year to a 14-month high.

    Hong Kong, where property companies owned by billionaires including Henderson's Mr Lee and Cheung Kong (Holdings) Ltd's Li Ka-shing account for about a 10th of the benchmark stock index, stopped supplying new land in 2002 in the midst of a seven-year property rout. The government started a new system of land auctions in 2004, after prices stabilised.

    Thomas Lam, Henderson's general manager for sales, said the company sold the 39 Conduit Road unit for HK$439 million, or HK$88,000 per square foot of space inside the apartment, equal to £pounds;7,102 (S$15,758) at yesterday's exchange rate. This breaks the previous record of £pounds;6,000 per square foot set by an apartment in One Hyde Park in London in 2008, Mr Lam said at a press conference in Hong Kong yesterday.

    Sun Hung Kai Properties Ltd, the world's largest developer by market value, last month raised the asking price of two penthouses in Hong Kong by 50 per cent to a record HK$75,000 a square foot, including a share of common areas in the building, as demand surges for luxury apartments. On that basis, Henderson sold its apartment for HK$71,280 per square foot.

    Housing completions in Hong Kong have been lower than initial government projections in the past two years. Builders finished 8,780 units, fewer than the forecast 10,980 last year, and 10,470 in 2007 against the forecast 12,740, the Rating and Valuation Department said in March. It then estimated completions at 14,740 for this year. - Bloomberg

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    http://www.straitstimes.com/Money/St...ry_442397.html

    October 15, 2009 Thursday

    HK flat sale sets new record at $12,900 psf

    Govt may free up land for sale to prevent property bubble


    HONG KONG: Henderson Land Development said yesterday it sold a Hong Kong apartment for a record price hours after the island's Chief Executive Donald Tsang said the government may release more land to deflate a property bubble.

    Henderson sold a duplex unit on the 68th floor of 39, Conduit Road in the posh Mid-Levels district for HK$71,280 (S$12,900) per square foot (psf) - setting a world record psf for an apartment and surpassing prices in London.

    The five-bedroom duplex suite was sold to an unidentified buyer from mainland China.

    The developer said it may ask for HK$100,000 psf for two penthouses on the 88th floor of the project.

    Property prices in Hong Kong have surged 26 per cent this year despite the economic downturn as there was strong demand for luxury property from wealthy Chinese and little supply of new homes.

    Hong Kong's government, which controls land supply, has not sold residential land for 1-1/2 years.

    'The relatively small number of residential units completed and the record prices attained in certain transactions this year have caused concern about the supply of flats, difficulty in purchasing a home and the possibility of a property bubble,' Mr Tsang said in his annual policy address.

    He said his administration will monitor 'market changes' closely in coming months, and may direct the Urban Renewal Authority and subway operator MTR Corp, both government-controlled, to bring readily available building sites to market.

    Hong Kong's currency peg to a weak US dollar makes property attractive to foreign investors.

    The peg forces Hong Kong to track US interest rates - which are expected to stay very low for some time - unlike South Korea, which has threatened to raise rates soon to stave off a property bubble.

    Developers have been wooing millionaires from China with a slew of all-expenses paid property-viewing tours.

    'People are paying what I describe as trophy prices which don't bear any reality with what is happening within the economy,' said Mr Nicholas Brooke, chairman of real estate consultancy Professional Property Services in Hong Kong.

    Money from new stock market listings and easy bank lending also allow Chinese to snap up luxury property, he said.

    Mr Thomas Lam, Henderson's general manager for sales, said the company sold the 39, Conduit Road unit for HK$439 million, or HK$88,000 psf of space inside the apartment, equal to &pound7,102 (S$15,670) at yesterday's exchange rate. This breaks the previous record of &pound6,000 psf set by an apartment in One Hyde Park in London last year, Mr Lam said.

    Sun Hung Kai Properties last month raised the asking price of two penthouses in Hong Kong by 50 per cent to a record HK$75,000 psf, including a share of common areas in the building. On that basis, Henderson sold its apartment for HK$71,280 psf.

    REUTERS, BLOOMBERG, ASSOCIATED PRESS

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