Profit-taking rife as prices soar in luxury homes sector
One man's bull market is another man's bear market.
As capital values for luxury houses rebound from a low in the middle of last year, investors are increasingly looking to take profits by offering their properties for sale.
However, property consultants remain confident of the market outlook because many of the super-rich are buying, betting on a continuing surge in luxury home prices.
Heading the seller's list is Esprit Holdings chairman Michael Ying Lee-yuen, who is offering his 8,895 square foot house at 4 Island Road, Deep Water Bay, up for tender. The property is estimated to be worth $160 million, double what he paid for it two years ago.
Shun Tak Holdings is selling its luxury residential block, comprising 30,000 sqft gross floor area, at 5 Tung Shan Terrace in Mid-Levels.
Pansy Ho Chiu-king, daughter of Macau gambling tycoon Stanley Ho Hung-sun and managing director of Shun Tak, recently sold her house at 56c Peak Road for nearly $80 million, a $13 million profit from just six months of ownership.
Landscope Realty managing director Koh Keng-shing said investors usually set a target price to determine when to dispose of their assets.
'As long as the price is reached, they will sell the properties to make profits,' said Mr Koh.
He said the unexpected surge in home values within the past nine months had prompted some owners to become investors.
'They have been tempted by the sharp rise in the values of their properties.' Mr Koh said prices for top-end properties - valued at $20 million or above - surged more than 80 per cent since last May. For instance, a house at Strawberry Hill on The Peak averaged $20 million last year. The owner received an offer of $40 million but rejected it.
According to Centaline Property Agency, 136 apartments and 91 houses on The Peak and in the Southside of Hong Kong Island changed hands between the beginning of this year and March 4.
This accounted for 62.38 per cent of apartments sold last year and 76.4 per cent of the total sold in 2002. For house transactions, there were only 61 deals clinched in 2002 and 125 transactions recorded last year.
Mr Koh said the recent sales were not an indicator that the market had peaked as buying demand remained strong and transaction prices were on the rise.
Victor Lai, managing director of Centaline Surveyors, a unit of Centaline Property Agency, said the disposal trend would slow when this batch of sales was completed.
The second batch of luxury home-buyers would not reap the same fat profits as the first batch because they had paid a lot more for their properties.
