HONG KONG: British real-estate company Grosvenor Group may raise prices at a new Hong Kong apartment project to reflect rising values of luxury homes in the city.

Grosvenor, owned by the Duke of Westminster's family trust, has priced as many as 30 apartments at an average price of HK$13,000 ($1,677) a square foot and may sell the remainder for more, according to Mark Hahn, the company's managing director of development in Greater China.

"The market will improve and there will be further adjustment afterwards," Hahn said at the media preview of Westminster Terrace yesterday. The project in Tsuen Wan, a district northwest of the city center, consists of 59 duplexes ranging from 3,200 square feet to 6,500 square feet.

Sales of homes for more than HK$10 million ($1.3 million), almost tripled in September from a month earlier to 1,351, according to figures from the Land Registry on October 5. There were 168 such sales in September 2008. Prices rose as much as 28 percent in the first nine months of 2009, Colliers International said on September 28.

Hong Kong home prices will be supported by low borrowing costs, limited land supply and low interest rates on savings, said Clement Fung, chairman of Asia Standard International Group, Grosvenor's venture partner. The strong yuan is drawing Chinese buyers, he said.

The Hong Kong dollar, pegged to the US currency, has dropped against the yuan every year since 2004. It fetched 0.8812 yuan at 5:09 pm yesterday, whereas it traded at parity at the end of 2006.

Hong Kong's builders completed the fewest apartments since 1972 and possibly earlier than that last year, and property prices have rallied 30 percent in 2009. Chief Executive Donald Tsang has warned about the possibility that a property market bubble may be forming.

"The government should consider ways to increase supply, such as having fixed land auctions or selling smaller plots of land so that everyone can compete," Fung said.

China Daily/ Bloomberg News

(HK Edition 10/23/2009 page3)