Surveyors have lowered by 3% to 10% their valuations of the two sites after the government released new cooling measures for the property market last Friday, Aug 13.
They expect the two sites at Argyle Street in Ho Man Tin and the Hung Hom Bay Reclamation will be sold for a total of between HK$5.7 billion and HK$6.2 billion (RM2.34 billion and RM2.54 billion).
That will help the government achieve at least 93% of its land revenue target for the year. The government aims to generate HK$34.1 billion from land sales in the current financial year. Since April it has pocketed HK$26.05 billion.
Chan Cheong-kit, a director at Lanbase Surveyors, expects developers would now be looking to build smaller flats at the projects after the Hong Kong Monetary Authority tightened mortgage restrictions for properties valued at or above HK$12 million.
"Developers may shift to develop flats priced for less than HK$10 million," he said. "They will be cautious about bidding and the prices of the sites will be less than market expectations."
He believes the property market will enter into a short-term consolidation stage if bidding is lacklustre.
"But if the ample liquidity continues, property sales and prices will eventually go up. The negative impact on the property market is temporary. I don't think the consolidation stage will last long," he said.
Samsung Securities believes the bidding for the site in Argyle Street will be more aggressive than for the site in Hung Hom.
The 78,856-square-foot site at 204 Argyle Street could accommodate a luxury residential project with a total gross floor area of 394,282 sq ft and offer higher profit margins.
The site was previously the Civil Aid Service Training Centre and is located next to Kowloon City Police Station. A developer could construct a 26-storey building on the site, based on a height limit of 80 metres.
Willy Liu, managing director of Ricacorp Properties, expects the site will fetch HK$3.55 billion or HK$9,000 per sq ft, 24% more than the minimum guaranteed bid of HK$2.857 billion.
Prices of Celestial Heights, a new luxury residential project in the district, range between HK$11,000 and HK$12,000 per sq ft.
The other site to be auctioned, a 81,279 sq ft site in Hung Hom adjacent to Harbour Place, could provide a total gross floor area of 365,747 sq ft.
The Lands Department has imposed a building height restriction of not more than 100 metres on the site, which could accommodate residential buildings of about 30 storeys.
As there are two commercial plots in front of the residential site, only part of the flats in the project would enjoy a sea view facing North Point.
Alnwick Chan Chi-hing, executive director at surveyors firm Knight Frank, expects the site will sell for HK$2.5 billion, or HK$6,800 per square foot. — South China Morning Post