by bulltick » Tue Mar 23, 2010 1:28 pm
Cheung Kong Caps Homes Per Buyer at New H.K. Project
March 23 (Bloomberg) -- Cheung Kong (Holdings) Ltd., the Hong Kong-based real estate company controlled by billionaire Li Ka-shing, is capping the number of homes for each buyer at a new residential project as the government tries to curb speculation amid concerns of a property market bubble.
Each buyer, either using a personal name or that of a company, can purchase a maximum of two homes at the Festival City project located in the New Territories district, said William Kwok, director of Cheung Kong’s real estate arm.
“We found that many speculators are very interested in our project, and we want to protect the self-users,†Kwok, referring to those who buy homes for their own use, said in an interview by phone today. “The Hong Kong property situation is very hot, and we don’t want this project to be focused on the speculators.â€
Hong Kong’s government has expressed concern about surging property prices and will raise stamp duties on luxury residences from April 1 after increasing down payments for homes costing more than HK$20 million ($2.58 million). It also has pledged to supply more land and proposed selling more public homes.
Luxury homes in Hong Kong are typically defined as those costing more than HK$10 million each or are bigger than 1,000 square feet (92.9 square meters). Buying from rich mainland Chinese and near-zero interest rates on savings deposits fueled a 45 percent jump in prices of such homes in 2009, real estate broker Savills Plc said earlier this year.
No Pressure
Prices for Hong Kong luxury residences have risen 8.2 percent this year, signaling the government’s measures are not working. The average sale price of existing luxury homes this month is HK$11,823 a square foot, from December’s HK$10,931, according to transactions at 30 key luxury projects, Centaline Property Agency Ltd., one of the city’s biggest property agencies, said in a March 18 report.
Cheung Kong’s cap, effective immediately, isn’t due to government pressure, Kwok said. The developer made the decision after feedback from property agents and after market reports indicated that demand may exceed the number of units available for sale, he said.
“It is one way of trying to limit speculation - the intent is good - but it may be difficult to implement, especially if there is a lot of demand,†Benedict Ma, a Hong Kong-based analyst at CB Richard Ellis Group Inc., said today.
Mainland Interest
Festival City is attracting interest from Hong Kong and mainland Chinese buyers because it is located near China, Kwok said. It is a luxury project, based on the price of each home, he added. Cheung Kong, which is selling 1,360 apartments in the first phase, hasn’t decided on the exact pricing, he said.
Festival City would be priced at least from HK$7,000 a square foot upwards, while the average price of existing homes in the New Territories ranged from HK$4,000 to HK$5,000 a square foot, said Wong Leung-sing, an associate director of research at Centaline.
Sun Hung Kai Properties Ltd., the world’s biggest developer by market value, in February said it sold apartments at its Yoho Midtown project in the Yuen Long area of New Territories for an average of HK$5,400 a square foot.
Located on top of the Tai Wai subway station, the apartments offered in the first phase range from 874 square feet to 1,373 square feet, when including common areas such as lift lobbies, according to Cheung Kong’s Web site. Cheung Kong is building Festival City in three phases consisting of more than 4,000 units.
Cheung Kong’s cap was reported today by Ming Pao, a Chinese-language paper.
The property developer grew out of the plastics business Li founded more than 50 years ago. Forbes Magazine this month named the 81-year-old as Asia’s third-richest man with an estimated net worth of $21 billion.
Source: Bloomberg