Leung Chun-ying failed to suppress home prices with his 'Hong Kong property for Hong Kong People' scheme. Photo: One Kai Tak, HK govt
Leung Chun-ying failed to suppress home prices with his 'Hong Kong property for Hong Kong People' scheme. Photo: One Kai Tak, HK govt

Consider the case for a first-time buyer who bought four flats at the site near old Kai Tak airport. This was a record-breaking sale for China Overseas, the No 1 mainland property developer, at One Kai Tak because the price paid was HK$164 million (US$21.1 million), or about HK$25,000 per square foot back in January.

Apparently the buyer changed his mind again. He canceled the transaction and bought another four units for even more at HK$200 million, or HK$30,600 per square foot, which was record-high in southeast Kowloon district. The buyer said he had changed his mind as he did not want to live near a garbage room on the ground floor.

Although the luxury residential estate was built as a part of the so-called Hong Kong property for Hong Kong people,” scheme, which requires that all buyers must be local people and first-time homebuyers, it is not difficult for someone to bypass this rule.

Mainland Chinese can borrow a Hong Kong identity card to complete the deal, while a local property speculator, who purchased properties in company names, can also be a “first-tome homebuyer” by using his or her real name.

After all, who will believe that a local first-time home buyer can afford an apartment for HK$200 million?

CY’s promise

Property developers must say thank you to Hong Kong Chief Executive Leung Chun-ying, who said in his 2012 election campaign that he would suppress the city’s property prices, but at the end of the day it was a hollow promise. 

Despite the complete failure of his Hong Kong property for Hong Kong people” scheme, Leung was selected as the vice-chairman of the Chinese People’s Political Consultative Conference, China’s top advisory body on Monday.

Undoubtedly Leung deserved the praise from Beijing as he had created a lot of business opportunities for mainland Chinese developers in Hong Kong during his term that began in 2012.

It is not uncommon for mainland developers to jack up demand for their residential flats, which have surged for the past seven years to a record high now.

Especially in Kai Tak, where most of the land was bid up by hungry mainland developers in the newly developed area. Hainan Group, for example, submitted a bid for three plots of land of more than HK$20 billion in the past year.

As temperature soared in the already hot property market, the government imposed a 15% sales tax for non first-time buyers last November. This measure poured cold water on the market until the developers figured out that they could lure one buyer to purchase a dozen flats in one go.

That appears to what has happened at One Kai Tak, the new Kowloon East area with subway access when the Sha Tin-Central link opens.

But the steamy property prices are not just in the mass market, crazy sales were recorded in The Peak area. A buyer paid HK$1 billion for a close to 10,000 square foot house at Mount Nicholson for a record price on a house in December last year.

Now it has emerged that the registered buyer, Chau Yau-keung, is a public housing estate tenant at Tung Chung, according to a local newspaper report.

Even of Chau won the Mark Six lottery every time his year, he would not have had enough money to buy the home.

So how is it possible? Your guess is as good as mine, or ask a developer.