Return of record prices at top end

A growing number of deals in major housing estates are being done at record prices as owners seek to cash in on a recovery in market sentiment, property agents say.

Although the big-ticket deals are concentrated in the top end of the market - mainly for penthouses or special flats - the signal sent by the transactions would be positive for the overall housing market, they said.

'Owners are cashing in on the market rebound as they are getting offers they cannot resist,' a director of Midland Real Estate, Sammy Po, said.

On Wednesday last week a 1,408 square foot penthouse with a 925 sq ft rooftop in Taikoo Shing sold for HK$24.8 million, or HK$17,614 per sq ft, setting a new record for lump sum and price per sq ft for the estate.

The price broke the previous record set in August last year when a 1,182 sq ft penthouse sold for HK$17.15 million - HK$14,509 a sq ft.

The record-breaking run continued over the weekend, with a 1,180 sq ft penthouse at Kingswood Villas in Tin Shui Wai selling on Saturday for HK$5.88 million, or HK$4,983 sq ft, a level not seen since the market's previous peak in 1997; and a 1,056 sq ft special flat with a 300 sq ft sky garden at Oceania Heights in Tuen Mun selling for a record HK$7.02 million, or HK$6,648 per sq ft, on Sunday.

'Prices of such high-end flats surged to unbelievable levels in the past week,' the head of research at Ricacorp Properties, Patrick Chow, said. 'It is a rare piece of good news for the market, but the longer-term outlook for the general market is still unclear.'

Given the limited supply of such flats, only a few transactions could be concluded in a year, Chow noted.

In the general market, sales volumes were down, but prices in the 50 major housing estates monitored by Ricacorp had increased by 3.4 per cent over the past three weeks, Chow said.

Deal numbers declined by 8 per cent to 387 for the period March 3 to 11, he said, as home seekers needed time to adjust to the rapid rise in prices. Sales volumes had earlier reached a 55-week high of 501 for the week of February 13 to 19.

Last year, property prices declined by about 5 per cent, with average monthly sales declining to below 5,000 from the normal level of 8,000.

Po said the headline-making deals at the high end of the market would help lift market sentiment. Asking prices for flats in quality estates that commanded good views had already risen by 5 to 8 per cent from two weeks ago, he said.

But it would be several weeks before it would be safe to gauge their real impact, he said, adding that buyers of top-priced flats were likely to be long-term investors who were upbeat about the outlook for the market for the next two to three years.

The chief executive of Hong Kong Property Services, Richard Lee Chi-shing, said investors began returning to the market in the middle of last month.

'They are taking the view that the outlook for property prices is favourable since the uncertainties created by the euro debt crisis are receding, and interest rates are likely to remain low until 2014,' he said.

8%

The percentage by which a Midland agent says asking prices for flats in quality estates with good views have risen in past two weeks