Luxury homes near Happy Valley still in demand

PUBLISHED : Friday, 03 July, 2009, 12:00am
UPDATED : Friday, 03 July, 2009, 12:00am

The property market has seen its fair share of ups and downs over the past 12 months, but prices of luxury homes in Hong Kong, particularly in Eastern Mid-Levels, near Happy Valley, are relatively resilient.

Buyers are attracted to properties with views of the Happy Valley racecourse, such as those along Stubbs Road.

A 2,200 sqft apartment on the second floor of Craigmont, on Stubbs Road, recently sold for HK$24.8 million - a deal completed by estate agent Midland Realty.

This renovated, four-bedroom, two-bathroom property was last on the market in 2001, when it sold for HK$9.86 million, netting the owner a healthy 151 per cent profit.

And it is not just the rustic charm of buildings in this low-density neighbourhood that is generating these returns.

A major factor supporting prices of between HK$10 million and HK$30 million in this area is the tight supply of mid-rise apartments, according to Jackie Lee Miu-ling, a director at Midland Realty in Happy Valley.

'If you compare prices in this area before the financial tsunami, you'll see that they didn't drop. In fact, if you look at the list of new transactions, this area is always near the top of the transaction price range,' Ms Lee said. 'Investments in this location are mostly for the end-user market, and there are not many units available.

'The last transaction for Craigmont was two or three years ago, and there is always a big [time] gap between transactions.'

These tight supply conditions are expected to hold because no new land is expected to be sold by the government in this area.

Even if land is made available, Ms Lee believes that prices will be in the HK$20,000 per-square-foot range, making new developments costly.

She also said that while these factors were supporting price levels in this area, the demand side of the equation had been bolstered by the volatile performance of other asset classes in the past 12 months.

One significant appeal of older buildings in Eastern Mid-Levels was their cost efficiency, she said.

The majority of them do not offer club and recreational facilities found in newer developments, resulting in lower building levies.

And internal club facilities are not an issue for buyers looking at this area because they are typically already members of other private clubs.

Their interest is firmly split between living in an old building with character and return on their investment.

Ms Lee said the owners of the recently sold property in Craigmont planned to move in. But, if they could realise a profit instantly, they would sell it right away.

Other properties for sale include a 1,337 sqft three-bedroom apartment at Gallant Place, 15 Tung Shan Terrace. The asking price for the property, which has a view of the racecourse, is HK$12.8 million.

A 2,000 sqft four-bedroom flat at Green Lane Court, 130-140 Blue Pool Road, is for sale at HK$22 million.