Premium between ordinary and unique units widens
Penthouses and duplexes sell for up to 92pc more than standard apartments as appetite grows for something different
BUYERS' GROWING appetite for unique residences is resulting in exceptionally higher prices for duplex and penthouse units, widening the premium over ordinary apartments.
Because of their scarcity, developers often use these units as selling points to arouse market interest in their projects.
CB Richard Ellis said some developers were already harnessing this strategy by putting increasing emphasis on this niche market.
Duplex and penthouse units have always commanded a premium over standard apartments in the same development. 'However, this premium has widened considerably alongside the general revival of the property market since mid-2003,' said Simon Wong, associate director of global research and consulting for Greater China at CB Richard Ellis.
Even with the additional costs of building materials for upgraded fittings and decoration in duplex and penthouse units, developers' profit margins are still much higher than for standard units.
CB Richard Ellis director of residential services Jane Garnett said the premium payable for these 'unique' apartments had widened considerably from an average of 37 per cent in 2002 to as much as 92 per cent this year.
'The desire for larger properties, a prestigious address, something better than the ordinary, privacy, extra terraces or roof terraces, [a] more 'homely' feel and a shortage of town houses are factors that buyers are increasingly willing to pay premium on,' she said.
The affluent do not just want a good view. Nor are they satisfied with a 'must-have' address.
'Hong Kong's elite want something more. Something that will make them stand out from the crowd, and they are prepared to pay for it,' Ms Garnett said.
Penthouses often have terraces or roof terraces which standard apartments do not have. And duplexes have a more homely feel, with accommodation split into one floor for entertaining and the other for bedrooms.
According to CB Richard Ellis the average price differential between apartments and duplexes was about 37 per cent to 38 per cent in 2002.
In the second half of 2002, apartments at No1 Po Shan Road in Mid-Levels sold for an average of $9,150 per sq ft and penthouse units went for an average of $12,635 per sq ft, or 38 per cent more.
At the same time, The Albany in Mid-Levels saw average prices of $8,700 per sq ft for normal apartments and $11,927 per sq ft for duplex units, a 37 per cent premium.
In April and May this year, two penthouses at Hang Lung Development's The Harbourside in Union Square, Kowloon Station, sold for $20,000 per sq ft - a premium of 62 per cent over the average price of $12,500 per sq ft for standard units.
An even greater differential was recorded at Parc Palais in Ho Man Tin. During the first quarter of this year, standard apartments sold for an average of $6,500 per sq ft. One duplex unit sold for $10,920 per sqft, or a premium of 68 per cent.
At The Albany, standard apartments went in April for about $13,000 per sq ft and a penthouse sold for $21,930 per sq ft, achieving a premium of 68 per cent.
A penthouse at the recently released Grand Promenade in Sai Wan Ho sold for $12,500 per sq ft, 92 per cent more than the average of $6,500 per sq ft achieved for standard units.