The HK$17.3 billion shelled out on Wednesday for a residential site in Cheung Sha Wan, pictured, is the largest lump sum ever being paid for a development site in local history, topping the HK$16.8 billion splashed out for a site in Ap Lei Chau in February.
The new record amount is breathtaking, so it's small wonder that some ambitious existing flat owners, who have been trying to offload their properties on the secondary market, are suddenly jacking up asking prices.
But it also means it will take much longer for the owners to sell their units, because residential prices were already unrealistically high, and well above the affordability level for most would-be purchasers.
Many of those flocking to new projects are being lured by developers' offers of extremely high mortgages - more than 100 percent financing in some notorious cases - in their desperation to climb on the housing ladder.
The market is at present greatly distorted from sound economic principles.
The record HK$17.3 billion sum being paid by a consortium, led by Sino Land, is bound to buoy sentiment to the extreme, which may blind the need for caution, as governments are moving in concert to tighten liquidity in general.
However, a level of caution is evident in the winning bid. The amount may be huge, but the risk is being shared among a consortium of major developers, with the others in the wolf pack including Shimao Property Holdings, Wheelock Properties,
K Wah International, and SEA Holdings.
Are they confident in the future of the market? The answer is definitely "yes" - or else they wouldn't have committed to the record sum. But they must be concerned about a possible market reversal, knowing the property market is completely beyond people's general purchasing power. It's probable that Sino Land is still reeling from its bitter lesson in 1997. Back then, it paid HK$11.8 billion - a record at the time - to acquire the Siu Sai Wan site where it developed the Island Resort housing complex.
Unexpectedly, the Asian financial crisis swept through the region, setting off a crash, which led to the sarcasm that one had better watch out when Sino Land comes out in force.
Sino may be aggressive in the latest strike, but it's more cautious this time as evident by the consortium partnership.
The partners stand to reap mouth- watering profits as the units could fetch HK$30,000 a square foot after completion - meaning HK$9 million for a tiny 300-sq-ft flat.
But at the same time, they're aware of the prospect for a market correction.