Developers rush to bid for Kai Tak's latest residential land plot as bull market returns to Hong Kong's real estate

By Pearl Liu pearl.liu@scmp.com / https://www.scmp.com/business/article/3008785/developers-rush-bid-kai-taks-latest-residential-land-plot-bull-market?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | May 6, 2019 3:52 PM SGT
Developers submitted seven bids for the third-largest residential plot at Hong Kong's former Kai Tak airport, as April sales data showed home transactions jumping by 52.8 per cent from March, in a clear sign of the bull market's return to the world's most expensive city.
Kai Tak's Area 4C Site 2, a sliver of land sitting on the former Kai Tak runway, can yield 641,168 square feet (59,566 square metres) of gross floor area. It is valued at HK$11.5 billion (US$1.47 billion), or HK$18,000 per square foot, smashing the record set in May 2018 when Sun Hung Kai Properties paid HK$25.16 billion, or HK$17,776 per sq ft, for a mixed-purpose lot.
"The recent increase in home price has been amazingly fast," said Vincorn Consulting and Appraisal's managing director Vincent Cheung. "Developers are keen to seize land at prime locations [such as Kai Tak] so it wouldn't be a surprise at all if a new benchmark were to be set."
In land-scarce Hong Kong, developers buy plots from either the government or the city's subway operator MTR, and their bids are often a weather vane for the property market's direction. Kai Tak, offering full view of Victoria Harbour, is the epicentre of Hong Kong's race for land, where developers often outbid each other by as much as 50 per cent just to get their hands on harbourfront land to add to their order books.
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Bids have returned after a lacklustre January, when Hong Kong's housing market went through a five-month price correction.
That correction reversed course amid the dovish interest rate policy by the US Federal Reserve, which compelled Hong Kong's monetary authority to mirror the same policy stance. As a result, the property bull market returned to the city, posing a stiff policy challenge to the administration of Chief Executive...