Two Kowloon sites up for auction

The Hong Kong government will be selling two land sites in the Kowloon area in its fifth land auction this year, after several developers committed to pay the minimum price needed to trigger the sale.

The government announced that an unidentified property developer agreed to pay HK$1.77 billion (S$317 million) for a site located in the Hung Hom district, with a maximum gross area of 34,000 sq m.

The other site, located near the Mongkok district and has a maximum site area of 36,600 sq m, will be sold for around HK$2.86 billion in an auction on August 17.

Home prices in the city-state have increased 5.7 percent this year, adding to last year’s 29 percent advance. As the government is seeking measures to minimize the risk of a property bubble, Financial Secretary John Tsang vowed to increase the supply of land for sale.

On June 8, Sun Hung Kai Properties Ltd, HK’s biggest developer by market value, acquired a residential site at the Ho Man Tin district for HK$10.9 billion. This was the highest paid price in a government auction since the market peaked in 1997.

After the auction, Mr. Tsang stressed that potential homebuyers should consider their ability to pay before taking any mortgages.

The next government auction is scheduled on July 28.