Stability and prosperity

PUBLISHED : Friday, 11 February, 2011, 12:00am
UPDATED : Friday, 11 February, 2011, 12:00am
 

As the effects of the government's cooling measures start to ease after the Lunar New Year, developers are launching sales campaigns for new homes. Forecasts of the number to come on the market this year range from 14,000 to 18,000.

However, new supply in the luxury sector will remain small, which will underpin sentiment and drive prices higher.

According to Ricacorp Properties, about 4,700 new luxury flats should be available. The supply on Hong Kong Island will be extremely limited at 1,027 new units, compared with 1,855 in Kowloon and 1,877 in the New Territories.

Demand remains solid, even after the implementation of extra stamp duty to cool sentiment and curb speculation.

Cherrie Lai, head of residential property at Hongkong Land, says the company sold 10 units at Serenade in Tai Hang Road, Mid-Levels East, generating HK$500 million, within four weeks of the government announcing its cooling measures in November.

'We have been able to attract buyers from overseas who look for trophy properties, just like a penthouse in Manhattan, as well as people working in the real estate business,' Lai says.

'Despite the drama in the market over the past year, we have maintained our prices fairly consistently. We believe our pricing of HK$20,000 to HK30,000 per square foot is very attractive for new luxury property with a full sea view.

'People will prefer to invest their money in property to fight inflation. Owners of luxury property have the financial strength to hold even when the market is not good. Prices for such properties are very resilient.'

Semy Ng, general manager for marketing at Kerry Real Estate Agency, believes the luxury market will maintain steady growth in prices and rentals 'because of limited new supply, especially in urban areas, the low interest rate, high inflation expectations and growing demand from mainland purchasers'.

The increasing number of foreign financial institutions setting up offices in Hong Kong will also boost the luxury leasing market.

Kerry plans to launch three luxury developments totalling more than 1,200 units. They comprise a 970-unit project in Wong Tai Sin, a 150-unit project at Wilmer Street, Western District, and a 126-unit project in Shan Kwong Road, Happy Valley.

Sun Hung Kai Properties (SHKP) sold a 6,140 sqft house at Shouson Peak for HK$282.8 million last month, representing an average price of HK$46,059 per square foot.

Simon Lo, director of research and advisory at Colliers International, says the volume of short-term trading subsided substantially after the introduction of special stamp duty, but prices started to pick up again last month.

'Luxury residential property prices are predicted to edge up by 8 per cent in the next 12 months. Rising inflationary pressure and sustained increase in occupational demand will continue to drive luxury residential rents upwards by 10 per cent,' Lo says.

The biggest luxury project on Hong Kong Island will be a joint venture between Sino Land and K Wah at Welfare Road, Sham Wan, providing 411 units of 1,000 sqft to 5,000 sqft in six towers.

Also coming on stream on Hong Kong Island are China Overseas Property's new development at No 6 Stanley Beach Road comprising 10 houses of 4,300 sqft each, and K Wah International's Chantilly project at No 6 Shiu Fai Terrace, Mid-Levels East, comprising 24 apartments of about 3,600 sqft each.

Swire Properties has sold about 40 luxury flats at Azura in Mid-Levels West at an average price of up to HK$22,500 per square foot since its launch in November, with about 50 units still available for sale.

Henderson Land is due to market The CentrePoint in Staunton Street, Mid-Levels, comprising 136 units. Wing Tai Properties has a 100-unit project in Warren Street, Tai Hang, and another development at Coronation Terrace, Mid-Levels West, with 50-60 units.

Cheuk Nang (Holdings), chaired by socialite Cecil Chao Sze-tsung, is putting on sale 16 apartments, of about 2,800 sqft to 4,500 sqft each, at Villa Cecil Phase II in Pok Fu Lam at HK$11,599 to HK$17,329 per square foot.

SHKP has kicked off soft marketing for its 650-unit Imperial Cullinan project at Hoi Fai Road on the waterfront of West Kowloon that the developer says will allow residents an unobstructed view of Victoria Harbour.

Another major project in West Kowloon is Sino Land's and Nan Fung's 740-unit joint venture at Hoi Wang Road. Sino Land also has a 120-unit luxury project at No 1 Broadcast Drive.

Eric Lam, director of Ricacorp Properties, says the luxury sector will continue to see brisk trade, with strong demand from local end-users and investors, including some mainland buyers.

'The luxury market will continue to outperform the mass sector this year and we expect a steady growth in prices. Some buyers and investors may turn their attention to luxury homes in the New Territories where prices have lagged far behind the growth for properties in urban areas,' Lam says.

Providence Bay will be the biggest luxury project to go on sale. The 1,200-unit joint venture, led by Sino Land and Nan Fung, is being built in Pak Shek Kok overlooking Tolo Harbour.

More luxury houses at Henderson Land's Legende Royale in Tai Po will be released.

Wong Leung-sing, associate director of Centaline Property Agency, says the luxury sector will grow as a result of limited supply and increasing wealth.

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