Hong Kong stamp duty

Scape house sale at HK$252m bucks sentiment

HK buyer gives market a boost after stamp duty keeps mainland purchasers out of luxury homes

PUBLISHED : Friday, 21 December, 2012, 12:00am
UPDATED : Friday, 21 December, 2012, 4:25am

A Hong Kong buyer has bucked the real estate market's weak sentiment by splashing out for a detached house on the city's south side.

The buyer yesterday paid HK$252 million for a 5,051 square feet house in a luxury development in Chung Hung Kok. It is the biggest residential transaction in the Southern district since the government introduced a 15 per cent stamp duty for corporate buyers and non-permanent residents in late October to cool the property market. The measure has kept mainlanders, who had accounted for about 40 per cent of new luxury homes sales, away.

The price for House No 8 in the Scape development, which is owned by Singaporean fund Hillcrest Capital, represents almost HK$50,000 per square foot. Still, that's about 9.2 per cent lower than the development's first sale in June before the stamp duty was imposed.

At 4,578 sq ft, the development's show suite was sold for HK$250 million, or HK$54,608 per square foot. It came with luxury decoration, and was sold to a corporate buyer.

The Scape project comprises eight three-storey detached houses, with areas ranging from 4,500 sq ft to 8,000 sq ft. According to a market source, the owner is seeking between HK$280 million and HK$290 million for the houses.

Michael So, associate district manager at Midland Realty's Deep Water Bay branch which handled the deal, said House No8 was sold as a bare-shell and had no interior decoration.

"The buyer of House No 8 will need to spend another HK$10 million to decorate the villa before moving in," he said. The house comes with a lift, a five-car garage, a heated pool and a garden.

"The buyer has been looking for his dream house for nearly two years, and now is a good buying opportunity as prices have met his budget," So said.

Since the stamp duty was introduced on October 27, So said mainland buyers have nearly pulled out of the top-end residential market.

Alva To, head of consulting for North Asia at property consultant DTZ, said a mainland buyer cancelled the purchase of a flat worth HK$50 million right after the stamp duty came into effect.

"The buyer decided to quit as the [stamp duty] will cost him HK$7.5 million. The amount of the tax is enough to buy a flat in Taikoo Shing," To said.

Separately, a 1,454 sq ft foreclosed flat at The Harbour Side in West Kowloon sold yesterday for HK$40 million.

That was about 12 per cent below typical prices of HK$45 million in the housing estate, according to real estate agent Hong Kong Properties.