Situated at the heart of Hong Kong, prime properties in Kowloon Tong offer an exclusivity few can rival.
Data from Midland Realty shows that the average price of firsthand properties in Kowloon reached an historic peak in the first half of this year, at HK$10.8 million per unit.
With West Kowloon and East Kowloon projects often stealing the limelight with strong sales, it is easy to take one's eye off traditional luxury districts in the peninsula. With properties typically built in a low-density environment, Kowloon Tong always has a tight supply, especially new ones. But when a new project comes to the market, there is solid demand.
Wing Tai's 43-unit project, Forfar, has already sold all standard apartments, with prices reaching HK$20,000 per square foot, leaving just one triplex penthouse and one duplex, which the developer has just put on the market. 'Our buyers like the exclusivity of the area. They include local buyers, mainland buyers and expatriate buyers,' says Karen Li Kan Fung-ling, director of corporate development at Wing Tai.
'We sold about half the apartments during presale in 2009. When we started selling the rest around April this year, when the project was completed, they were quickly absorbed.'
Midland Realty expects as many as 6,000 new residential units will potentially be put on the market in Kowloon, including Tseung Kwan O, in the second half of this year, but only 185 will be from Kowloon Tong.
'Kowloon Tong is a very stable market because supply is scarce, prices are very firm,' says Andy Ho Ming-pui, director for Kowloon at Midland Realty.
Another prime property in Kowloon Tong is 1 Oxford Road by China Overseas. The development comprises 12 houses, each with a private garden. A 7,762 sqft house was sold in May for HK$238 million, at HK$30,662 per square foot, setting a record for a property in the area. The district's prestigious locations led developers to pay top dollar for suitable sites. In May this year, China Overseas bought a site at 62 Begonia Road for HK$579 million. The HK$15,742-per-square-foot tag was the third highest selling price in Kowloon.
In August last year, Kerry Properties paid HK$1.285 billion, or HK$16,587 per square foot, for a site at Ede Road in Kowloon Tong, setting a record for price per square foot for Kowloon. But in October, Chinachem paid HK$1.63 billion for another site on Ede Road, at HK$17,976, establishing another new record.
The most anticipated new project is Sino Land's 1 Broadcast Drive, a site that formerly housed senior civil service quarters. Sino bought the site for HK$1.94 billion in 2006, at HK$9,868 per buildable square foot. It is believed the roughly 120-unit project could be launched within this year.
Secondhand prices in Kowloon Tong have remained firm despite the government's stabilising measures. Many owners are refusing to lower prices because they are often end users in no rush to sell on the cheap.
In July, a 1,133 sqft apartment at Mount Beacon, developed by a Sino Land-led consortium, was sold for HK$15 million, that is HK$13,239 per square foot.
Nearby, a 1,429 sqft unit at One Mount Beacon, a Cheung Kong project, was sold for HK$23.1 million, at HK$16,165 per square foot.
'Kowloon Tong is a traditional luxury district in Kowloon, which has long attracted industrialists. They like the neighbourhood because if its low density and the strong school network,' says Jeff Law, head of Kowloon Residential Sales at Savills.
In addition to the famed '41' network of top primary schools, there are also the prestigious La Salle College and Maryknoll Convent School. There is also no shortage of choice for those seeking an overseas education system, with institutions such as the Australian International School situated in the area.
'Kowloon Tong's positioning is between the top luxury properties on Hong Kong Island, such as those at The Peak and Island South, and those in the New Territories. Prices have been rising gradually, and support is very resilient,' Law says.