Three key areas lead high-end rebound
HOME PRICES on The Peak and in Island South and Mid-Levels are leading the luxury sector's spectacular rebound.
Buyers have been out in force to snap up properties in these traditional high-end residential districts, fuelling price rises of more than 60 per cent from last year's market trough.
According to FPDSavills, luxury prices in Mid-Levels have surged about 73 per cent from the market bottom while those on The Peak have rebounded 69 per cent. In Island South, prices have jumped by more than 55 per cent.
Average luxury prices on Hong Kong Island rose by 46.7 per cent in the first three quarters of this year.
FPDSavills said luxury prices climbed a further 6 per cent in the third quarter after a consolidation period in the second quarter.
Sales activity increased in particular for luxury properties on The Peak, Island South and Mid-Levels.
Five luxury apartment deals were recorded in Grosvenor Place, Repulse Bay, in the third quarter, with an average price of about $18,000 per sq ft.
A house at 28 Gough Hill Road on The Peak with a total floor area of 5,983 square feet sold for $130 million, or an average price of nearly $22,000 per sq ft.
A 4,500 sq ft apartment at Altadena on The Peak changed hands for $78 million, at $17,333 per sq ft.
In Mid-Levels, a 1,755 sq ft apartment at The Albany sold in July for $27.5 million, or an average of $15,670 per sq ft. A 2,528 sq ft apartment at Regency Royale was traded for $40.6 million, at $16,060 per sq ft.
Simon Lo, director of research and consultancy at Colliers International, said luxury prices in prestigious districts such as The Peak and Island South would continue to lead the market recovery.
The luxury stock in these areas had been tight and supply of new flats would remain limited in coming years, he said.
Colliers International said average luxury prices on The Peak were about $10,796 per sq ft as of August. Prices in Island South averaged $8,644 per sq ft while those in Mid-Levels stood at $7,426 per sq ft.
With the positive market sentiment, developers have brought forward launch campaigns for new developments including Manhattan Realty's project in 42 Island Road, Shimao China Holdings' development in Severn Road on The Peak and Paladin's project at 8 Peak Road.
Solid economic performance, buoyant investment demand and an anticipated decline in supply will be the key driving forces behind continued growth in the luxury residential sector.
Colliers expected luxury sales transactions to increase in the short term. It also predicted prices would rise by 20 per cent.
