The company set up by the government to manage Bayside, a project above a station in the city’s northwest, rejected tenders for the site, according to a statement. The site, with gross floor area of 2.2 million square feet, was expected to fetch HK$7.4 billion ($953 million), according to the median estimate of five surveyors in a Bloomberg News survey.
Home prices in Hong Kong increased 70 percent between the beginning of 2009 and their 14-year-high in June and have since fallen 3.5 percent as increased borrowing costs and taxes deterred buyers. The government tightened mortgage lending requirements and restarted scheduled land auctions, which were halted in 2004, to help slow surging prices.
“It’s obvious developers are getting more cautious,” said Eddie Hui, a professor in the Department of Building and Real Estate at the Hong Kong Polytechnic University. “They’re very mindful of all the additional supply that will be put into the market by the government.”
Home prices in Hong Kong, the world’s most expensive place to buy a home according to Savills Plc, may fall as much as 25 percent between now and 2013, according to Andrew Lawrence, Hong Kong-based analyst at Barclays Capital Research.
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