Developer competition drives up hong kong land prices

Photo: Sanfamedia.com

Competition is heating up among developers in Hong Kong. Sales values are forecast to reach HK$200 billion this year, as buying sentiment is strong. Midland Realty chief economist Buggle Lau Ka-fai predicts that the transaction total will be 15 per cent higher than the HK$177 billion recorded in 2014.

For builders to make the most of the market conditions, they need to replenish supply to build more.

Indeed, according to Knight Frank's Thomas Lam, many sites have seen more than 10 bidders competing against each other in government auctions, with local construction firms also fighting for their share.

"Land prices will see an upside trend as developers have no choice but to offer aggressive bids if they want to win the tender," Lam told SCMP.

"Sitting on strong cash reserves, property firms have to speed up the pace of construction and step up efforts to market new projects in order to drive higher turnover," added Victor Lai Kin-fai, chief executive of consultancy Centaline Professionals.

Kin-fai said that the market has been accelerating since the middle of 2014, which is helping to to encourage the aggressive bidding.