New Territories property surge to continue
Values of luxury residential properties in the New Territories have appreciated dramatically and are expected to see sustainable growth this year, according to a property consultant.
The surge in prices has been boosted by increasing demand, especially from a newly wealthy group who achieved big gains from the city's booming stock market, said CB Richard Ellis (CBRE).
Prices of luxury units in the New Territories have risen 37 per cent since March, outperforming Hong Kong island's 22 per cent and Kowloon's 10 per cent.
'Luxury properties in the New Territories have emerged as a favourite choice among this newly affluent middle-class group and the higher-income group as well,' said Alan Man, a senior director of residential services.
However, this group of residents was still effectively priced out of buying property in the traditional luxury districts.
'Therefore, they turned their attention towards seeking similarly high-class premises but in secondary locations,' Mr Man said.
CBRE also spotted the correlation between the Hang Seng Index and the prices of luxury properties in the New Territories.
Between January last year and April this year, the Hang Seng Index rose 29 per cent while the New Territories price index gained 30 per cent, it said.
Developers also showed growing interest in upmarket sites in the New Territories citing the higher than expected prices fetched for government auction sites in Tai Po and Tuen Mun as examples.
Luxury properties in the New Territories might see faster growth in terms of percentage, said Yu Kam-hung, senior managing director of valuation and advisory services at CBRE's Greater China office.
CBRE has forecast that more than 1,500 luxury units in non-traditional districts will come on stream over the next two years, about three times as many as in traditional districts.
Rick Santos, managing director of CBRE's Hong Kong office, said luxury prices overall would see 10 per cent to 12 per cent growth this year due to strong demand.
He said the Hong Kong luxury market had undergone a number of cycles since the handover in 1997.
The market was hit in the financial crisis in 1998 and reached a 10-year low with the outbreak of Sars in early 2003.
The rebound began the following year amid an improving economy and limited supply, Mr Santos said.