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Opening of Kwun Tong MTR Line extension will lift upcoming land sale bids
Hong Kong, 23 October 2016 – The opening of Kwun Tong MTR Line extension ("KTL-E") today is expected to lend support to property sales in Whampoa and Homantin, and fuel the bids placed on the MTR Corp's upcoming residential land sale tenders, according to JLL's latest Hong Kong Residential Sales Market report released today.
The realisation of new railway infrastructure has traditionally been said to serve as an impetus for residential price growth in the benefiting districts and boost demand for commercial amenities; sometimes known as the "MTR effect." Figures from JLL's research department showed residential capital values in Whampoa and Homantin have increased 95% and 80%, respectively, since the KTL-E was gazetted in November 2009, outperforming a 61% increase recorded for Hong Kong overall over the same period.
The milder "MTR effect" for Homantin could be due to the new MTR station's distant location from the district's established private residential clusters.
With "1023", opening of the South Island Line (East) by the end of the year and other railway infrastructure projects on the pipeline, all eyes—developers, investors and end-users alike—are expected to remain on capitalisation opportunities for the "MTR effect". Coupled with improved sentiment in the overall market, bids placed on the upcoming MTR Corp tenders in 4Q16—the first packages of the two property development projects at Homantin Station (about 1,000 flats) and Wong Chuk Hang Station (about 800 flats)—could surprise the market.
Henry Mok, regional director of Capital Markets at JLL, said: "In Hong Kong, residential projects with railway connection have always been more popular to buyers. Once the KTL-E starts to operate, properties in Whampoa and Homantin should be able to draw more interest from buyers, leading to an increase in transaction volumes and a possible boost in property prices in the two districts. As such, we believe that he tender of MTR Corp's Wong Chuk Hang Station and Homantin Station residential development projects at the year-end should be able to attract significant interest from local and mainland developers looking to capitalise on the potential gains. The final land price for the Wong Chuk Hang Station tender could even hit a new record high for mass residential development sites on Hong Kong Island."
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