DISTRICT of desire
Happy Valley has not been immune from the recent chill that has hit the local property market.
According to Kelvin Yuen Wai-lam, senior sales manager at Midland Realty, who covers Happy Valley and East Mid-Levels districts, there were only 60 rental transactions in September, compared with a normal monthly average of more than 100. There were only 16 sales in September, significantly lower than the monthly average of 30 during the severe acute respiratory syndrome epidemic in 2003.
Despite the downturn, industry experts expect prices to remain relatively stable in this traditional luxury residential area. Happy Valley is a preferred destination of well-heeled families as it is a family oriented district with a number of good restaurants along Sing Woo Road.
'Property owners in Happy Valley have better holding power than those in other districts because of their financial capacity and thus they are not desperate to get rid of their properties, even when the market is down,' Yuen says. 'Most of them don't need the cash because they are wealthy long-term investors.'
Thomas Lam, director and head of research at Knight Frank, says the high proportion of end-users among property owners in the district is another factor that helps to keep prices stable.
'If the economic downturn continues or worsens and multinationals start to scale back their headcount in Hong Kong, this would affect the leasing market in areas like Mid-Levels, but it would not materially affect Happy Valley,' he says.
The enduring appeal of Happy Valley lies in its convenient location, low-density development, intimate community and neighbourly feel that provide a special living experience which is difficult to find in the city. It is also popular among local families because it is in a catchment area for some of the best schools on Hong Kong Island, and parents want to live in the neighbourhood so that their children can enrol in them.
'The racecourse also appeals to some buyers,' Lam adds. 'The only unfavourable factor is the lack of a good transport network, there's no MTR link, though many property owners would prefer to keep it that way to maintain the environment.'
The short supply of new units is another important reason why places in Happy Valley have remained in demand and expensive in recent years.
Rentals range from HK$30 per square foot for older units to HK$40 per square foot for newer, well-decorated ones, or as much as HK$58 per square foot for luxury apartments. Selling prices range from HK$9,000 to HK$10,000 per square foot for older apartments to HK$27,000 per square foot and above for top-of-the-line apartments in opulent estates.
'The Happy Valley property market is more resilient and will always perform better than many other residential districts because of its many durable qualities,' Yuen says. He adds that government measures to curb speculation failed to affect Happy Valley, pointing out that prices went up by about 10 per cent in the first half.