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Hong Kong property: land parcel for starter homes in Tsuen Wan likely to draw few bids as high interest rates subdue market
- The site earmarked for almost 2,000 starter homes for middle-class Hong Kong families is likely to draw only a handful of low bids, say analysts
- The ‘market situation is no good … due to the interest rate,’ says James Cheung of Centaline Surveyors, who expects as few as four bids for the plot
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A plot of land in the western New Territories earmarked for almost 2,000 starter homes for middle-class Hong Kong families is expected to draw only a handful of low bids as high interest rates subdue market sentiment and the scale of the project deters developers.
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The parcel at Yau Kom Tau, Tsuen Wan, went on sale by public tender on Friday, according to a statement from the Housing Bureau. The tender, which will close on August 18, requires all of the flats to be offered as starter units priced at 80 per cent of market value.
The aim is to assist those who are not eligible for Home Ownership Scheme (HOS) flats but cannot afford private housing, according to a spokesman for the Housing Bureau.
Analysts estimate the value of the 1.05 million square-foot site at between HK2.1 billion (US$270 million) and HK$4.22 billion.
High interest rates and the likelihood of further hikes, against the backdrop of a slowing external economy, are denting sales of homes as well as land, said Alex Leung, senior director at CHFT Advisory and Appraisal.
“I guess there will be some three to five bids only,” said Leung, adding that the size of the project would also be a deterrent.
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