China Overseas Land and Investment has snapped up the last piece of Hong Kong government land this year as it took a second bite of the cherry at the old Kai Tak Airport.

The top mainland property developer paid HK$8.03 billion (US$1.03 billion) for a Kai Tak Area 4B site, or about HK$13,523 per square foot.

Despite the sale price being at the lower end of expectations, the deal concluded a down year marked by the absence of aggressive mainland developers known to bid up the price of Hong Kong land in the last five years.

In 2013, China Overseas won two pieces of land in the Kai Tak site auctions for a total of HK$2.27 billion, or about HK$5,200 per square foot.

The bid brought in a jackpot to China Overseas because it was able to offload the home units at an average price of more than HK$18,000 per foot in 2016 and 2017 and inspired a rush of mainland property developers on a treasure hunt in Hong Kong.

Almost all property developers including second-tier and relatively known names bid and won a Hong Kong land tender in the golden period where they rushed to get money out of China.

Between 2016 and 2017, more than half of the Hong Kong land on offer was sold to Chinese parties. Most notably, HNA Group spent more than HK$22 billion buying up four Kai Tak sites at a price that was reported to be 50% higher than market prices since November 2016.

However, the gold rush did not last long. HNA, which was bothered by financial troubles for its aggressive overseas buying spree, ended up selling three of its four pieces of land in the past 12 months – all at a slight premium to its acquisition price.

That cooled off Chinese developers’ interests, as shown in this year’s land tenders. Only two of the 15 government tenders were won by mainland developers. Other than the winning bid by China Overseas yesterday, Poly Property Group paid HK$3.3 billion for a Yau Tong site in the summer.

Overall, the Hong Kong SAR government netted HK$80 billion from land sales, down 37% due to the cooling down of mainland property interests. Time will tell if the mainland gold rush in Hong Kong has ended after one of the biggest five-year property booms.

In fact, property prices in non-prime districts in the city have gone down roughly 10% this year due to rate hikes, but prices did not decline much in prime districts on Hong Kong Island and Kowloon.

Grand Central, located in Kwun Tong and opposite the Kai Tak site, still saw strong sales performances. Its developers, which include Sino Land, Chinese Estates and Urban Renewal Authority, swiftly sold more than 500 apartments at about HK$19,000 per square foot this month. It showed that not all buyers were worried about the coming rate hikes.

Last month, L’aquatique in Tsuen Wan and Reach Summit in Yuen Long in the New Territories saw lukewarm responses from buyers. Developers may cut prices to sell their apartments.

If Chinese property developers want to bet on the Hong Kong property market, sites in prime districts are obviously better choices.