HK tycoon buys prime land for top dollar

Li's Cheung Kong (Holdings) bought a 7,551-square-meter waterfront plot in the city's Kowloon district for HK$3.51 billion (US$450 million), with around 150 bids placed in just over an hour.

The final price was nearly twice the opening bid of HK$1.77 billion, and translates into a per-square-foot price of US$9,597 dollars, making it the most expensive land in the district.

The whopping price exceeded estimates of HK$2.30 billion to HK$2.82 billion from analysts polled by Dow Jones Newswires.

The blue-chip developer also bought another auctioned site, a 7,326-square-meter plot also in Kowloon, for HK$4.10 billion.

The price was 43.5 percent higher than the opening bid and above the top end of market estimate of about US$3.90 billion.

Developers remained upbeat despite a series of government measures announced last week to rein in Hong Kong's soaring residential market.

House prices in Hong Kong surged nearly 45 percent from their trough at the end of 2008, while prices of some luxury flats have returned to, or surpassed, the peaks of the 1997 property boom.

“The new measures will not change the imbalance of supply and demand of residential buildings. The increase in land supply in recent months is not sufficient to satisfy the large appetite for residential flats,” Charles Chan, managing director for Savills Valuation and Professional Services, told AFP.

The Hong Kong Monetary Authority warned banks that the credit risks they faced in residential mortgages were rising and unveiled measures to help them cope.

These included lowering the loan-to-valuation ceiling to 60 percent for properties worth HK$12 million (US$1.54 million) or more. The ceiling for all non-owner-occupied residential mortgages would also be lowered to 60 percent.

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