It is boom time for the real estate industry. Almost every other day, there is news of record sales taking place everywhere across the globe. The latest record-breaking sale to make it to the headlines has taken place in Hong Kong. A luxury plot in Hong Kong fetched 1.82 billion Hong Kong dollars (US$233 million) that are about HK$68,000 ($8,720) per square foot! The price was way above market expectations and a record high for a Hong Kong auction of luxury residential land, according to auctioneers Jones Lang LaSalle. This sale has clearly defied the government’s effort to temper the top end of the real estate market. The buyer of this prime plot who shelled out the enormous sum is 82-year-old tycoon Lee Shau-kee who controls blue-chip property player Henderson Land Development Co. The plot, called Falconridge, was put up for auction by Hui Sai-fun, another Hong Kong property tycoon. After the auction, Mr. Lee’s son Martin told reporters that the family planned to build three or four houses on the site, without elaborating.
The sale indicates that the luxury land prices in Hong Kong are soaring without any intentions of slowing down. On its part, the government has made various efforts to control the rising prices, including levying taxes on luxury properties. But the recent auction makes one question of how effective these measures have been.
However, not all are pessimistic about the government’s efforts; Nicholas Brooke, chairman of real-estate consultancy Professional Property Services Ltd., said Tuesday’s high sale price didn’t mean the government’s cooling measures were failing. “The Peak is all about trophy-hunting,” he said. “It’s not the real world, the world of the average Hong Kong citizen.”