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Wednesday, December 20, 2006

Mind Boggling!!

Reported on Wednesday, December 20, 2006

Sun Hung Kai Properties (0016) went all out at a land auction Tuesday, shelling out HK$1.8 billion (equiv USD 231,496,367 and GBP 117,428,293) for a prime luxury residential site on The Peak, and in the process beating market forecasts and smashing the previous record price per-square-foot set in 1997.

The accommodation value of the site at 12 Mount Kellett Road translates into HK$42,196 per square foot (equiv USD 5,426 and GBP 2,752), based on the site's developable gross floor area of 42,658 square feet.

Sun Hung Kai Real Estate Agency executive director Victor Lui Ting said the group would invest an additional HK$2.5 billion (equiv USD 321,514,792 and GBP 163,064,858) to develop about 10 houses on the site.

Vigers Appraisal & Consulting executive director Tony Chan Tung-ngok said the final price was astonishing. "It may be the highest price per square foot in the world," Chan said.

After spending more than HK$42,000 (equiv USD 5,401 and GBP 2,739) per square foot for the land, plus construction costs, Lam reckoned the developer would need to sell the finished homes at a target of HK$60,000 (equiv USD 7,717 and GBP 3,912) per square foot in order to realize a profit.

..... and they'll be snapped up and probably achieve another world record in the end. Madness.


Matt Kohai said...

And here I though NYC and SF could be expensive... yeesh... makes even 1980's Tokyo look like a bargain.

Fiona said...

Hi Matt...this is an expensive city to be sure...even my little 'sky box' comes at a heavy cost.

I should have bought here years ago but never took the plunge. I've known people to have made 100% profit from buying/selling at the right time.

Most of these houses will be bought by the rich businessmen from over the border.

anna said...

That is insane! Who has that kind of money? And why won't any of them buy me a birthday present?!

LePhare said...

It's hard to believe that our property has gone up x5 in twelve years, but it's all relative.

It's going to get where a couple buy a property, and their grandchildren finally pay it off.

How does 'the man in the street' manage in H.K?

Fiona said...

It is insane Anna....and they will be bought by our comrades from over the border!!!

Ian...what they do is live at home, there is also a lot of 'assisted' housing and high rentals. We live in little air boxes mainly and most people will factor in roughly 30-50 percent of income as rental.

There's a huge live-in nanny market here as double-income is an absolute requirement for families.

Property is also used for speculation, it's not unusual to have apartments empty for years as they are bought and sold.


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