Luxury flat prices to grow, says Kerry

PUBLISHED : Friday, 04 May, 2012, 12:00am
UPDATED : Friday, 04 May, 2012, 12:00am


Kerry Properties forecasts prices of luxury residential units will grow a further 10 to 20 per cent as new supply remains tight.

Chu Ip-pui, executive director of Kerry Real Estate Agency, yesterday said the future supply of small flats would increase due to building in the New Territories. However, supply of luxury and large flats is tight, which will keep luxury residential prices buoyant.

He said the price of the Repulse Bay site sold at tender this week was not low. Tai Cheung Holdings won the tender for the site with a bid of HK$1.668 billion or HK$39,673 per square foot on Wednesday.

Simon Li Wing-sau, executive director at Tai Cheung, said the company had acquired the property as there were few luxury residential sites left available in Hong Kong.

'It is hard to find luxury residential sites in the city. The sites are becoming scarcer and scarcer. Even if there is a downturn in the property market, the prices of luxury sites and properties would not fall sharply,' he said. 'Despite the government releasing new measures , the impact on the luxury residential market will be limited. It would be difficult for the government to increase the supply of luxury residential sites,'

He said the firm planned to invest a total of HK$2.1 billion to build 9 to 10 houses on the site. He is expecting to sell them at between HK$70,000 and HK$80,000 per sq ft.

Koh Keng-shing, managing director at Landscope Surveyors and Landscope Realty, said prices of nearby houses are selling at about HK$50,000 per sq ft currently.

'The selling price of the project has to reach 80,000 per sq ft in order to generate a reasonable profit. It shows the developer is optimistic about the luxury market outlook,' he said. 'The land sale result has had a positive impact on the luxury market and will support property prices.'

He believes the prices of luxury flats will stay firm this year, but growth will be depend on many factors, including the global economy.

Kent Yu, a manager at Ricacorp Properties, said there was no immediate impact on the market from the land sale but that sellers will not be about to cut their asking prices.