Hong Kong expats and locals leaving the island, seeking flats in West Kowloon, real estate data shows
Driven out by high rents, expats and Westernised locals are increasingly looking for property in places such as Jordan and Tai Kok Tsui, and businesses are moving from Hong Kong Island too
Hong Kong Island residents often refer disparagingly to Kowloon as “the Dark Side”. If English-language property search data is any indication, however, more flat hunters – expatriate and local – have been turning their backs on the overpriced island in the past year. And it’s not just about the money: Kowloon is increasingly seen as more liveable.
Data from property listings start-up Spacious.hk shows a 5.4 per cent drop in flat searches on Hong Kong Island in the second half of 2015 compared with the first six months of the year. Although this by no means signals an exodus, it corresponds with a 4 per cent increase in residential property searches in Kowloon, a 3.5 per cent rise in searches for outlying islands property, and a 3.1 per cent uptick in searches for flats in the New Territories.
Spacious recorded 550,000 residential property searches in the first half of 2015, growing to 900,000 in the second half. The percentage changes in search volume are adjusted to factor in the site’s growth, says Asif Ghafoor, founder and CEO of Spacious. Ghafoor suspects the migration is largely price driven, but suggests it could be compounded by other factors.
With property prices in the city overall reaching an all-time high towards the end of last year, “Hong Kong Island as a whole has become very unaffordable”, he says. “We have an affordability function on our platform that helps drive this point home. It shows that there are only a handful of areas you can live on Hong Kong Island making HK$50,000 a month without spending more than 50 per cent of your income on your apartment.”
Two such areas, which bucked the downward trend, have been relatively affordable by island standards. These are Kennedy Town, where 5 per cent more people were looking for accommodation, and Sai Wan Ho, which recorded 6.1 per cent more searches.
Given Kennedy Town’s rapid makeover since an MTR station opened in the area in December 2014, its jump in the popularity stakes is a no-brainer, Ghafoor says.
“Kennedy Town is the new cool neighbourhood of Hong Kong. There are lots of great new coffee shops and restaurants in the area, which cater to a wide range of tastes,” he says. “Areas to the west of Central, like Sheung Wan and even Sai Ying Pun, have become increasingly expensive, and Kennedy Town is the next and last place for the migration west out of Central.”
Ghafoor says the buzz surrounding Sai Wan Ho surprised him and his local colleagues, because it’s an area that appears to have been largely off the white-collar radar. The search data was supported by other statistics, he says. “Rental price per square foot going up at the same time as sale price per square foot indicates both renters and buyers find the area attractive.
“A few years ago, if someone wanted to live cheap on Hong Kong Island then you would look to Fortress Hill or North Point. Both areas have gone up in price and the next most affordable place on the island, within commuting distance of Central, is Sai Wan Ho.”
It is also a few stops on the train from Swire Properties’ office cluster of Taikoo Place in Quarry Bay.
Another attraction of Sai Wan Ho for gastronomes is a laid-back dining destination on the harbourfront around the Lei King Wan private housing estate, which is marketed as Soho East.
Mark Cholewka, founder and CEO of Shore Hospitality, chose Soho East as a second location for The Salted Pig Bar & Eatery because it has a big captive audience, and “it’s hard to find a good property in Hong Kong on the waterfront”.
“It was a very good choice,” he says. “We’ve been overwhelmed from day one. We had more than 400 customers on the day we opened [six months ago] and had to close early because we ran out of food.”
Although most of the clientele are Chinese, Cholewka says he wouldn’t describe them as local. “They are cosmopolitan, high-net-worth, with a higher than average education about food – different from, say, Tai Po.”
Cholewka says the group will open a second restaurant, Cull & Pistol, in Soho East in March.
A branch of pizza bar and grill Wildfire is also slated to reopen in Soho East in February after a renovation.
Increases in the number of searches on Spacious elsewhere in the city showed a marked focus on some old expat favourites. There was a 3.5 per cent increase in searches for flats in the Outlying Islands district, with the greatest interest seen in Discovery Bay. In the New Territories, where there were 3.1 per cent more searches, by far the most activity was seen in Sai Kung.
However, the biggest interest among flat seekers was in Kowloon, and particularly West Kowloon. Jordan, a traditional working-class neighbourhood, recorded 5.5 per cent more searches, while 4.5 per cent more interest was seen in Tai Kok Tsui, around the Olympic MTR station.
Both neighbourhoods are in close proximity to the International Commerce Centre (ICC) and surrounding new office buildings where thousands of white-collar staff work.
Multinational banks including Morgan Stanley, Deutsche Bank and Credit Suisse are based in the area. HSBC and Bank of China have back offices adjacent to Olympic station.
For senior executives who regularly travel overseas for work, the area is convenient for the airport via Kowloon station, and trains to Hong Kong station in Central take just a few minutes. Olympic is also close to Kowloon’s bustling heart. It takes 10 minutes to walk to Mong Kok station without leaving the air-conditioned comfort of the vast, three-phase Olympian City mall complex.
Underground club XXX is moving to an industrial building in Tai Kok Tsui in February, after five years on the island. Founder Cassady Winston says an attraction is the creative wellspring in the area, especially in Mong Kok and Sham Shui Po, another old neighbourhood that has seen signs of gentrification in the past year or so.
“When I first announced that we were moving to Tai Kok Tsui, I got a 90 per cent ecstatic response. A lot of people were saying, ‘great, I don’t have to take a taxi home any more’,” the Californian says. “It’s close to a burgeoning makers’ area. There are lots of little cafes, music spaces and other things popping up.
“I’ve been saying, Central is not Central any more. We are moving to Tai Kok Tsui because we want to be central,” says Winston, who is moving the club from Sai Wan; it was previously in Sheung Wan. The new XXX will be similar to the original club – a BYOB space with music, a gallery, film shows and other activities. It will be located less than 10 minutes walking distance from both Olympic and Mong Kok stations, he says.
“There’s a commonly held notion among people living on Hong Kong Island that there’s a big barrier between the island and Kowloon, but there isn’t,” Winston says. “It’s just psychological. We’re trying to break that down. We want to create a cultural area,” he says, adding: “It’s a leap of faith.”
Other ventures to have made that leap last year, sprinkling a little stardust on the Dark Side, include British celebrity chefs Gordon Ramsay and Jamie Oliver. Both opened their second Hong Kong establishments in Tsim Sha Tsui – Ramsay the gastropub London House, and his rival a second Jamie’s Italian.
Cultural critic John Batten says he has always argued that Kowloon is Hong Kong’s true soul, and the growing interest shows merely that it is re-establishing its position as a viable residential area for a wide range of the community.
“The fact is, there has been a realisation in the last 10 years that with Hong Kong’s good public transportation, getting around is quite easy ... The development of West Kowloon and the huge private residential developments along the whole West Kowloon reclamation – from near Mei Foo, Tai Kok Tsui, down to Jordan and the top of Canton Road has increased the availability of larger flats,” Batten says.
He also points out that, apart from Tai Kok Tsui, businesses are also moving to Kwun Tong and Kowloon East, where a new business district has sprung up. “The low-rise/industrial buildings near the former airport are now being developed, and there is a variety of private and public housing being built. The mix of people is consequently also changing,” he says.
Ironically, the way Kowloon is developing may not make it more liveable, Batten says.
“Unfortunately, as in Sham Shui Po, the traditional low-rise landscape and vibrant street life is being changed by development – the Urban Redevelopment Authority is particularly destructive.
“Many parts of Kowloon have been immune to traffic-clogged streets, but this is changing as the government also encourages and builds road infrastructure, and this will make Kowloon a less attractive, less easy place to live and get around. If the barren West Kowloon reclamation is the way ‘ahead’, then what I have always argued as Kowloon being Hong Kong’s true soul will be so much poorer.”