 Yoho Midtown |
Speculation about a slow down in Hong Kong’s skyrocketing real estate market was quashed today, when property company Sun Hung Kai Properties Ltd. announced it had sold 900 apartments over the weekend for a total of HK$4.2 billion ($540 million)
The apartments were in the Yoho Midtown development, almost an hour from downtown. Prices averaged HK$5,400 per square foot, dramatically higher than the HK$3,000 per square foot buyers were paying for homes in Hong Kong a year ago, Bloomberg reports.
In general, prices in Hong Kong rose 29 percent in 2009, stoking concerns that a new property bubble was forming. Last fall Henderson Land Development sold a five-bedroom apartment for a jaw-dropping HK$439 million ($56.6 million), believed to be a record for Asia.
Buyers from mainland China are driving much of the activity, accounting for 20 percent of high-end residential unit sales, according to data from Centaline Property Agency shows.
"There should be a correction at some point,” Justin Chiu, executive director of Cheung Kong Holdings, told Bloomberg. "Buyers must not expect the same pace of growth in prices in 2010."
But industry boosters note prices are still below record levels. And analysts still predict prices will rise anywhere from 15 to 20 percent in the next year.
To help dampen the enthusiasm of speculators, the government recently imposed a stamp duty on sales of property of more than $2.7 million. But the recent sales activity suggests it’s not working.
About 80 percent of the buyers in Yoho Midtown this weekend expect to live in the apartments, a company spokesperson said. Forty units were immediately advertised for resale at higher prices, the South China Morning Post reported.
Sun Hung Kai Properties, Hong Kong’s largest developer, also made headlines today by paying $434 million for a 130,000-square-foot plot in a Hong Kong suburb, as part of the government’s first property auction of the year. Sun Hung Kai intends to build residential units on the site—and why not?
Potential buyers literally lined up to review the Yoho Midtown project, which was offering apartments ranging from 400-square-feet to 1,400-square-feet.
