Hong Kong outpaces London as priciest city to buy a home, says CBRE
An inaugural survey of leading cities by CBRE shows Hong Kong home prices the world’s most expensive on a per square foot basis
Hong Kong has topped London and New York to become the world’s most expensive city to buy a home despite softening sentiment towards the housing market, according to an inaugural global survey on prices in leading cities by CBRE.
Hong Kong’s residential prices averaged US$1,416 (HK$11,044.8) per square foot, outpacing London’s at US$1,025 and New York at US$842, according to the property consultant’s Global Living Report.
CBRE said its guide tracks prices in 31 of the world’s most popular residential locations.
“Hong Kong will maintain its top ranking at least for next year despite a price correction that is widely expected,” said Simon Lo Wing-fai, an executive director at Colliers International.
Hong Kong is now so far ahead of other cities on a per square foot basis, that there’s little chance it will lose its top ranking even if home prices correct next year as many analysts predict, he said.
Colliers International forecasts prices in Hong Kong will ease 10 per cent next year, while CLSA predicts a 17 per cent decline through 2017.
Centaline Property Agency said its latest Centa-City Leading Index, which tracks secondary home prices at 100 housing estates, dipped 1.57 per cent to 144.61 for the week ended October 11. The index has risen 8.2 per cent so far this year.
Meanwhile, recent data showed that a 598-square foot public housing flat on Fung Wah Estate in Chai Wan was sold in the secondary market for a record-breaking price of HK$4.4 million or HK$7,366 per sq ft in terms of saleable area, according to the Land Registry.
The average price for a flat in Hong Kong is now around US$792,000, according to CBRE.
The property group cautioned that prices could go higher, as prime properties are currently averaging about US$2.5 million, while upscale properties are at around US$5.3 million.
“Prices are underpinned by a very constrained supply backdrop. Over the last decade on average an 110,000 units have been built, yet population has increased by a half a million residents,” the report said.
In August, a 9,890 sq ft home at 22 Barker Road on the Peak sold for HK$1.5 billion.
The price tag translates to HK$150,000 per square foot, making it the second most expensive home in the world in terms of cost per square foot.
“As the world’s population expands and the overall international economy continues to grow, we believe both factors underpin the fundamental demand for our region’s residential market,”
Henry Chin, head of research at CBRE Asia Pacific, said.
Singapore and Tokyo also made it onto the top 10 list of highest value locations. Japan’s capital ranked sixth at US$697 per square foot, while Singapore was fifth at US$810 per square foot.
Besides home prices, Hong Kong also retained the title of the most expensive place in the world to rent office space s, according to international property consultant Knight Frank.
In its latest Skyscraper Index, based on data for the second quarter, Knight Frank said Hong Kong’s office rents reached US$255.50 per square foot per annum.
That was 67 per cent higher than in New York, where rents per square foot per annum were US$153. Tokyo ranked third with prime office rentals at US$125 per square foot.