Hong Kong realty company caps homes per buyer in new project

Hong Kong: Cheung Kong (Holdings) Ltd., the Hong Kong-based real estate company controlled by billionaire Li Ka-shing, is capping the number of homes for each buyer in a new residential project as the government tries to curb speculation amid concerns of a property market bubble.

Each buyer, either using a personal name or that of a company, can purchase a maximum of two homes in the Festival City project located in the New Territories district, said William Kwok, director of Cheung Kong's real estate arm.

"We found that many speculators are very interested in our project, and we want to protect the self-users," Kwok, referring to those who buy homes for their own use, said in an interview by phone. "The Hong Kong property situation is very hot, and we don't want this project to be focused on the speculators."

Hong Kong's government has expressed concern about surging property prices and will raise stamp duties on luxury residences from April 1 after increasing down payments for homes costing more than HK$20 million (Dh9.4 million). It also has pledged to supply more land and proposed selling more homes.

Luxury homes in Hong Kong are typically defined as those costing more than HK$10 million each or are bigger than 1,000 square feet. Buying from rich mainland Chinese and near-zero interest rates on savings deposits fuelled a 45 per cent jump in prices of such homes in 2009, real estate broker Savills said.

Cheung Kong's shares fell 0.2 per cent to HK$97.90, after rising as much as 1.2 per cent at close yesterday. For the year, the stock has dropped 1.4 per cent, compared with 2.6 per cent decline in the Hang Seng Property Index.

Prices for Hong Kong luxury residences have risen 8.2 per cent this year, signalling the government's measures are not working. The average sale price of existing luxury homes this month is HK$11,823 a square foot, from December's HK$10,931, according to transactions at 30 key luxury projects, Centaline Property Agency, one of the city's biggest property agencies, said in a report.

Cheung Kong's cap isn't due to government pressure, Kwok said. The developer made the decision after feedback from property agents and after market reports indicated that demand may exceed the number of units available for sale.