Kowloon pips Island in luxury flats
Kowloon has displaced Hong Kong Island as the housing district with the highest number of top-priced apartment blocks in the city.
Sales data monitored by Ricacorp Properties' research department show that five of the 10 top-priced units sold in the city in the last three months were in Kowloon apartment blocks, namely the Harbourside, the Cullinan, the Arch, Mount Beacon, and Harbourfront Landmark.
In 2005, just three Kowloon apartment blocks featured in the top-10 price list, while three out of the 10 buildings were in Mid-Levels.
This year, however, Clovelly Court is the only Mid-Levels block to feature on the top-10 list.
The data underlines a trend that has been under way since the peak for property prices in 1997, when the Mid-Levels reigned supreme in the luxury housing market, being home to six of the top 10 apartment blocks by sales' prices, while all 10 of the blocks were on Hong Kong Island.
Apartments in Mid-Levels were formerly the most expensive in Hong Kong as the district was close to Central, the political and business centre of the city, and offered views of Victoria Harbour.
While the Peak remains the most expensive area for houses, the historical dominance of the Mid-Levels in the apartment sector has been broken by new luxury project developments in Kowloon, particularly those built above Kowloon Station.
'The luxury apartment landscape has changed since the influx of mainland buyers in 2005,' said Patrick Chow Moon-kit, the head of research at Ricacorp Properties.
Fuelled by demand from local and mainland buyers, the average prices of units near Kowloon Station are now much higher than prices fetched by units in the Mid-Levels, noted Chow.
'Property prices in Mid-Levels couldn't catch up with the rising prices of flats at Kowloon Station, as the housing estates in the area are old and lack facilities,' he said.
'For example, the average price of the 15-year-old Robinson Place, a popular estate in Mid-Levels, is still less than HK$10,000 per square foot compared with the minimum price of HK$10,956 per square foot for Sorrento at Kowloon Station.'
Patrick Fung, a sales director at Midland Realty, believes the new projects at Kowloon Station appeal particularly to mainlanders.
'They like to buy into new Hong Kong projects as they do in the mainland, where the primary market is more active than the secondary,' Fung said.
New projects at Kowloon Station were also among a limited number of options in the market, since only a few new residential projects had been developed in the traditional luxury districts in the last few years, Fung said.
Louis Chan, an executive director of Centaline Property Agency, agreed. He said most of the luxury residential buildings in the Mid-Levels were now more than 10 years old.
'The facilities of new projects in Kowloon are better than the buildings in Mid-Levels. For example, the Arch offers residents the use of a large clubhouse with many sporting and entertainment facilities. The apartment blocks in the Mid-Levels cannot compare with such features,' he said.
The Cullinan at Kowloon Station has proved to be one of the new projects particularly attractive to mainland buyers. According to property agents, about 10 per cent of buyers at the project held Chinese passports, while a further 20 per cent held Hong Kong identity cards with Putonghua phonetic transcriptions when the development was launched in February.
Also, views of the harbour and the high-rise buildings on the waterfront are attractive to mainland buyers. 'They think the Kowloon side has a better view than on Hong Kong Island,' Fung said.
'You must also give credit to the marketing of the developers,' said Ricky Poon, an executive director of Colliers International.
'The West Kowloon reclamation area has been packaged as a new landmark and the extension of the core business district and this has proved attractive to newcomers.'
But Hong Kong Island would continue to appeal to buyers in the luxury segment, said Richard Tong, a veteran investor and the chairman of Coda Properties.
'Location does matter. I would only buy luxury residential properties in Island South, the Peak and Mid-Levels. I don't have any residential properties in Kowloon,' he said, adding that only newcomers, who are unfamiliar with the Hong Kong property market, were willing to pay aggressive prices for flats in Kowloon.
However, Ricacorp's Chow said investors seeking capital gains were best advised to follow the market trend.
'The upside potential of the residential property market will depend greatly on how popular particular locations are to the mainland buyers. If you plan to buy a flat for investment and cannot afford to buy at Kowloon Station, you should buy in Taikoo Shing rather than in the Mid-Levels because Taikoo Shing is also well known to the mainlanders.'
Chow said the upside potential of flats in the Mid-Levels was now lower than units at Kowloon Station.
Kowloon's new luxury projects luring buyers away from Mid-Levels
Of the 10 top-priced units sold in Hong Kong in the last three months, blocks in Kowloon accounted for: 5