Hong Kong Development Bureau announces land sale plan for September to December, Zhongyuan: Expected rate cut in the United States to increase developers' confidence in land investment

According to the latest information from the Smart Finance and Economics App, the Hong Kong Development Bureau has just announced its land sale plan for the months of September to December. The upcoming land parcels to be released next quarter include a large residential site in Tai Wai and a multi-story industrial site in Hung Shui Kiu. The Tai Wai residential project is located on Mei Tin Road and is expected to provide 360 units, adding new land supply. The Hung Shui Kiu multi-story industrial site will continue to adopt the dual-envelope system, with the tender scheduled to take place at the end of January next year. This quarter, there are approximately 2,200 private residential units available, combined with the supply from the first two quarters of this year, totaling around 6,400 units, achieving about 50% of the annual target. MTR Corporation (00066) plans to relaunch Phase 1 of Tung Chung East Station, expected to offer 600 units, as well as three private redevelopment projects involving around 1,230 units.

Jason Cheung, Executive Director of Centaline Surveyors, mentioned that at the end of last month, the United States announced a 0.5% interest rate cut, which was followed by Hong Kong banks. Developers seized the opportunity to launch new projects one after another, with sales under a low-price strategy proving to be ideal. The overall market sentiment has improved, likely boosting developers' confidence in land acquisition. However, the remaining inventory of developers is still high, coupled with high construction costs, keeping property prices in a consolidation phase. Most developers are not in a rush to increase land reserves, and their bidding strategies tend to be conservative. The government's decision to only tender one residential land parcel next quarter, following the approach of the previous two quarters, by offering a smaller plot in mature areas to reduce the risk of undersubscription, while also stimulating the market. The property market is currently in an interest rate reduction cycle, with the Federal Reserve expected to cut rates again later this year. If the rate cut stimulates the market starting in the fourth quarter, stabilizing property prices and boosting market confidence, it is believed that developers' confidence in land acquisition will also increase, making it appropriate for the government to release more land at that time.

As for the upcoming Tai Wai Mei Tin Road residential site next quarter, with a land area of approximately 38,536 square feet, it is located near residential developments such as Mayfair by the Sea and May Shing Court, and is expected to provide around 360 units. The surrounding area of the site is well-developed, with limited new supply in the area, making it moderately sized and attractive for investment. Referring to recent land prices in Siu Lek Yuen, the estimated price per square foot of gross floor area is around HKD 3,000, which is expected to attract the attention of small and medium-sized developers. The future development of the site into small and medium-sized units will significantly increase the supply of parking spaces in the area. As for the multi-story industrial site in Hung Shui Kiu, it is a special-purpose site with more considerations in the government's development design for the land, and will be sold in a dual-envelope format to better align with the land use intentions in the area