Entering the Year of the Horse, the property market sentiment has been continuing to improve, and the government has even announced a budget surplus prediction for this year. Experts predicted the property market will sustain the rebound momentum from the year of the snake to the end of the year of Horse, and the annual price increase will be over 10%. Despite the public overall optimism for the property market, the estimated government's revenue from land sales and land premium payments this year is only HK$13 billion, a decrease of 85% compared to HK$89 billion five years ago. If the property market outlook is becoming clear, developers should take advantage of the current low land prices to aggressively enter the market and replenish their land banks, so that they will earn substantial profits in the coming five years.
Last year, the government offered five plots of land for tender, and only three were sold. The accommodation value of Kai Tak residential site was sold for HK$5,392 per square foot, the Kennedy Town residential site for HK$7,071 per square foot, and the 
Cheung Sha residential site on Lantau Island for HK$2,492 per square foot. If the property price rises 85% in five years as prediction, the winning bids for these three sites are far below reasonable prices. Currently, the average transaction price of new residential properties in Kai Tak is around HK$20,000 per square foot. If this price increases by 85%, it will reach HK$37,000 per square foot. Based on this estimation, the accommodation value for the Kai Tak residential site would be at least HK$15,000 per square foot, meaning the government sold the land at a 36% discount.
Developers' land acquisition strategies are still extremely conservative. With a potential supply of 100,000 units over the next four years, it will be difficult to sell them all within five years. As expected, developers do not need to replenish their land banks right now. Furthermore, the government will arrange for land disposal for the northern metropolitan area three years later, and the estimated land price per square foot will not exceed HK$1,000. Since a large amount of affordable land will be released, land prices will continue to hit new lows for many years to come. Developers have limited funds and will be extremely cautious in their land acquisition. To attract developers to enter the market, the government will continue to provide more incentives, causing a downward trend in prices in the days ahead.
During the booming Lunar New Year seasons in previous years, real estate agencies' branches always remained operating on public holidays. However, many agencies' branches took a two-day break on the first and second day of the Lunar New Year, showing that the market was not as prosperous as expected. With many people traveling abroad during the Lunar New Year holidays, developers avoided launching large-scale projects during this period. Without any major new projects launching, the property market will lack a true spring rally.
