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Hong Kong property: developers give land for starter homes in Tsuen Wan the cold shoulder as market struggles with high rates, low demand
- Only Grand Ming Group bid on deadline day for the parcel earmarked for 1,950 flats that must be offered as starter units priced at 80 per cent of market value
- The ‘complicated’ nature of the project, which comes with numerous restrictions, may also have put developers off, according to analysts
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The tender for a plot of land in the western New Territories earmarked for almost 2,000 starter homes for middle-class families has been met with an icy response from developers, as Hong Kong’s property market creaks under the weight of high interest rates and subdued sentiment.
The “complicated” nature of the project, which comes with numerous restrictions, may also have put potential bidders off, according to analysts.
The 1.05 million square-foot parcel at Yau Kom Tau, Tsuen Wan, went on sale by public tender on June 23. It is earmarked for 1,950 flats no smaller than 280 square feet that must be offered as starter units priced at 80 per cent of market value.
Only one bid was submitted on Friday, the last day of the tender period, by Grand Ming Group Holdings. It is unlikely that many, if any bids, preceded it, although the government has yet to reveal the number of submissions.
“The tender had been expected by the market to only receive a moderate response, but from what we are seeing today, the number of bids will be even less than what we were expecting, only lukewarm,” said Alvin Lam, director at Midland Surveyors.
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“Interest rate hikes will have deterred developers and made them more conservative in their bidding, while the current property market atmosphere makes it difficult for them to predict future selling prices.”
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