Hong Kong authorities have invited the city’s second-largest public housing provider to take over a site in Tsuen Wan for the development of nearly 2,000 starter homes following another failed public land tender.

The Hong Kong Housing Society was asked to take on the project earmarked for no fewer than 1,940 starter homes for middle-class families after the government rejected the only tender, but an analyst said the arrangement could slow down construction progress.

The Lands Department announced the tender results on Wednesday, saying the bid submitted by Well Luck Limited, whose parent company is Grand Ming Group Holdings, was rejected as the “tendered premium did not meet the government’s reserve price for the site”.

The Yau Kom Tau project received one tender. Photo: Handout

The 1.05 million sq ft site at Yau Kom Tau in Tsuen Wan went on sale two months ago after being earmarked for a starter homes pilot project. Flats must be no smaller than 280 sq ft and are to be sold at about 80 per cent of the market value.

“Despite the cancellation of this tender, the government considers the site suitable for developing a starter homes project,” a Housing Bureau spokesman said, announcing that the Housing Society had been invited to take up the project.

The society said it was pleased to further discuss details with authorities, adding it would cooperate with the government in its effort to cope with residents’ housing needs.

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But Vincent Cheung, managing director of Vincorn Consulting and Appraisal, said the arrangement was not ideal. He said the Housing Society only had limited construction capabilities and the practice might slow down progress of the project.


Rather than asking the non-profit to take over the project, he said, the government should encourage more public-private partnerships and ease land sale conditions to attract more private developers to bid.

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The aim of the project is to help those who are not eligible for Home Ownership Scheme (HOS) flats and cannot afford private housing, according to the bureau.

Only residents who have lived in the city for at least seven years and never owned a home locally are eligible. Their income should fall between the limits for applicants for the HOS and a level 30 per cent higher.


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Recent land tenders have received a tepid response, as developers struggle with rising interest rates, an economic slowdown and the highest inventory in years.

In mid-February, the MTR Corporation withdrew a site earmarked for its first residential project at Oyster Bay station, which is under development, in northern Lantau Island. It received three bids, the fewest for an MTR project in nine years.


Earlier that month, the Urban Renewal Authority rejected a tender for a big plot of land in Kwun Tong because the sole bid from Sun Hung Kai Properties failed to meet the minimum requirement.

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In January, the government withdrew the biggest residential plot on offer in Stanley in Southern district in two decades after four tenders failed to meet the reserve price.


Earlier this month, CK Asset Holding priced homes at its new development Coast Line II in Yau Tong at levels not seen in seven years.

The flats were priced at an average of HK$14,686 (US$1,880) per square foot, about 16 per cent cheaper than the most recent launch in January of Wheelock Properties’ Koko Rosso project in the same neighbourhood.