Luxury houses have been one of the best-performing categories in the property market's revival this year. Midland Realty says in the first 20 days of this month, there were 101 transactions of first- or second-hand houses valued at more than HK$10 million apiece, the highest monthly figure since June last year.
The strong sales were due to the launch of major projects such as Park Island by Sun Hung Kai Properties; but it was a new project in Fanling, The Green by China Overseas Land and Investment, that supplied the most houses.
The Green went on presale last month and 210 houses were snapped up. The development is close to Fanling Lodge, the chief executive's alternate residence, and Hong Kong Jockey Club's Beas River Country Club.
'The Green has become the largest luxury houses project up for presale in this year,' says Yau Wai-kwong, managing director of China Overseas. 'We secured presale consent on February 15, but had already got more than 500 inquiries prior to the presale. The property is located in a traditional resort area for tycoons and a stone's throw from Hong Kong Golf Club in Fanling.'
Angus Hui Wai-pong, sales director of Centaline Properties, attributes the overwhelming response for The Green to the quality of the brand. 'The developer has only a handful of projects in town, but it has built a reputation on the mainland, so about 15 per cent of buyers are from the mainland. The developer has No 1 Oxford Road available for sale in Kowloon Tong, which costs about HK$170 million, but The Green is only one-tenth of the price.
Hui says the pristine northern New Territories has been developed as a place for luxury villas. 'The supply grew from demand in [the] past few years from properties like The Royal Oaks and Miami Crescent. They drew many buyers, especially those Hong Kong businessmen residing in Fairview Park in Yuen Long, to move up here, due to good accessibility to Lok Ma Chau.
'The demand for these luxury houses is mostly from outside the North District. Apart from local businessmen, mainlanders are also interested in this type of property and find it a safe environment and, most importantly, the price is okay with them.'
Ricacorp Properties sales director Tommy Chow says more than 70 per cent of buyers are local businessmen or traders who frequently cross the mainland border. The rest are mainland buyers. 'Hong Lok Yuen or Fairview Park were the only choice 20 years ago, but new supply, such as Valais and The Royal Oaks, stimulated owners to move from traditional 1,000-2,000 sqft accommodation to brand-new 3,000 sqft or more with a large garden,' Chau says.
'They crave a more spacious environment and private space. We even notice buyers from Hong Kong Island who either rent [units] out for long-term investment or treat [them] as resort houses.
'While the asking price in Tai Koo Shing is HK$17,000 per sqft. The Green is only HK$7,000-9,000 per sq ft, which works out to a bigger space with rooftop, double car park and a large green garden.
'Coupled with low interest rates until the end of 2014 and low unemployment rate, I am optimistic about the market. As there won't be any large-scale new supply like The Green in 2012, prices may head towards a new ceiling, depending on location and quality.
'The next possible supply would be a third phase of Valais, but nothing has been decided yet.'
Dicky Yip, an assistant associate director at Midland Realty, says there were two transactions at Valais recently. 'Many years ago, the area was barely connected by the transport network. Intensive collaboration between Hong Kong and China has prompted improvement of infrastructure around the border area. This continues to drive the demand of luxury houses.'