• Thu
  • Jul 24, 2014
  • Updated: 10:31am

Repulse Bay parcel could fetch HK$1b

PUBLISHED : Wednesday, 14 July, 2010, 12:00am
UPDATED : Wednesday, 14 July, 2010, 12:00am

Surging house prices in the luxury sector have encouraged owners to put top-priced properties up for sale - with a Repulse Bay property likely to carry a price tag of about HK$1 billion, according to agents.

The owner of the five-storey detached house and an adjacent five-storey residential block at 20 and 22 South Bay Road in Repulse Bay has appointed property consultant Knight Frank to sell the parcel of luxury properties by tender. Closing date for offers is August 18.

The buildings are on a combined 20,723 square-foot site that provides a total floor area of 37,324 sq ft, including open area. The site was bought for HK$130 million or HK$6,970 per sq ft at a government land auction 10 years ago.

A property agent said that following the strong growth in luxury residential prices the two properties could fetch a combined HK$1 billion or HK$53,616 per sq ft.

Another luxury residential property up for tender is house number 26 at Le Palaris in Tai Tam. The two-storey house has a gross floor area of 4,372 sq ft and an 840 sq ft garden. The tender will close on August 12.

A 12,318 sq ft house at Jardine's Lookout is also offer for sale at HK$400 million or HK$32,000 per sq ft.

Keith Chang, deputy senior director of the residential department of property agency Savills said the last deal done in the housing estate was in September last year when a house sold for HK$96 million, or HK$21,622 per sq ft - suggesting a possible price for the latest home on offer of between HK$110 million and HK$120 million.

The vendors of house number 26 bought the property for HK$55 million in 2001. 'They have decided to sell the property because market sentiment is good,' Chan said.

Clarence Chow Ho-yin, associate director at Centaline Property Agency, said an increasing number of owners were now willing to sell their luxury residential properties because prices had risen to high levels.

According to the firm, prices of luxury houses on The Peak and Island South have risen by 20 per cent and more than 10 per cent respectively so far this year.

'There are two types of vendors selling luxury residential properties currently. One is 'old family' that wants to cash in assets for estate allocation. The other is motivated by the profit that can be made at present prices,' he explained.

Contributing to the high prices, said Chow, was the limited supply.

'I don't think you will be able to find another new site available for luxury residential development in Island South in the next 20 years. But demand is strong. The entry price for a single house in Island South has risen to HK$600 million,' he said.

Property agents are now hoping the upcoming land auction of the site at Mount Nicholson Road on The Peak, and the former Civil Aid Service Training Centre in Ho Man Tin will record good responses.

But Landscope Realty managing director Koh Keng-shing worried that sales volumes could fall under the weight of rising prices.

'Flat owners may raise their asking prices sharply if the land auction result is positive and that could keep potential buyers away from the market in the short term,' he said.

Mainland buyers could possibly be counted on to remain a major driver of demand as long as the mainland economy continued to grow strongly, said agents.

'They have continued to look for luxury properties in Hong Kong in last few months,' said Alvin Yip, co-head of the investment department of property consultancy DTZ in North Asia. 'However, they are cautious as the cooling measures on the mainland are continuing and this could affect their income. They are also affected by tightened loan conditions,' he said.

A Nomura study found that mainland buyers accounted for 12 per cent of total property purchases in June, up from 9 per cent in March. Excluding corporate deals, purchases by mainlanders accounted for 18 per cent of transactions while other foreigners' buying accounted for 10 per cent. Only 71 per cent of deals recorded in June were by local buyers - the lowest proportion recorded in the firm's four surveyed periods beginning in September last year.

The latest time frame coincides with the measures taken by the central government to further tighten property lending, and Nomura said the tightening policy may have pushed some speculative demand from the mainland to Hong Kong.

The report found Kowloon remained the most favoured location for mainland buyers.

The proportion of mainland buyers involved in property deals in Kowloon rebounded to 22 per cent in June from 18 per cent in March, while in the New Territories it rose to 13 per cent in June from 2 per cent in March. Mainlanders accounted for 18 per cent of deals on Hong Kong island in June versus 16 per cent in March.

Henry Lam, executive director of investment services at consultancy Knight Frank, said he expected the austerity measures on the mainland and the appreciation of the yuan would prompt mainland buyers to search for luxury properties in Hong Kong.

Luxury at a price

Prices of luxury homes at Island South have risen 10 per cent this year

Centaline says the entry price for a home at Island South is, in HK$: $600m

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