While attention has been focused on soaring home prices in urban areas, an even faster surge is hitting some of Hong Kong's outlying islands, and it shows no sign of easing, say agents.
"Prices on some islands have risen by 15 to 20 per cent, and show no signs of slowing," Kenneth Yeung Shiu-ming, owner of Region Property & Management Agency in Cheung Chau, said.
"Sellers are very aggressive and some have even put their decisions to sell on hold in anticipation of higher prices."
The agency, which is one of two major operators on Cheung Chau, said home prices on the island had jumped about 20 per cent on average this year. Flats selling at less than HK$3,000 per square foot early this year were now priced at about HK$3,500 per sqft on average, Yeung said. The prices of homes near the pier had risen to between HK$4,000 and HK$5,000 per sqft.
Eye-catching transactions on the island included a seaside property in the Treasure Villa estate at 83 Sai Tai Road a few months ago. The 1,834 sqft, two-storey unit with a large garden and rooftop sold for HK$11.8 million to make it one of the priciest flats on the island, Yeung said.
The price, excluding the rooftop and the garden, worked out at close to HK$6,200 per sqft.
"Many people have been forced to move to the outlying islands because flat prices in the city are just too high," Yeung said. This demand has now driven up flat prices on the islands.
Yeung said policies that had led to an insufficient supply, combined with an improving economic outlook had boosted home prices. Rents surged by up to 25 per cent from HK$12 persq ft a month to between HK$15 and HK$16 per sqft.
On Peng Chau, property prices have also gone up by 20 per cent, and in some cases as much as 50 per cent so far this year, real estate agency A. H. Property's senior account manager Andrew Chiu said.
Some 700 sqft village flats on the island that were selling for between HK$700,000 and HK$800,000 at the beginning of this year were now priced at HK$1.1 million or more, he said.
Chiu said the price surge was due in part to Sino Land's purchase of a 49,127 sqft waterfront residential site on the island for HK$19 million in March, which stimulated market interest because it sent a signal that a large developer planned to expand to the island.
But the rise in prices was also due to the fact that flats in Peng Chau were more affordable and had therefore attracted strong demand, he said.
"With HK$1 million you may only be able to buy a car parking space on Hong Kong Island. Even if you wished to buy in the New Territories it would still cost you about HK$3 million for a 700 sqft unit," Chiu said.
In contrast with some areas, flats on the island offered good value and it took only 30 minutes for commuters to reach Central by ferry.
Joy Lee Ka-man, 31, who rents a 350 sqft flat on Cheung Chau plus premises from which she runs a flea market with a friend, says they retreated to the island because rents in the city are too high. They pay HK$3,000 a month for a one-bedroom apartment, plus HK$4,000 for a site to run the flea market at weekends.
"I can feel that property prices here have been rising, but it's still cheaper than those in urban areas," Lee said.
Prices in urban areas or new towns have risen by about 12.27 per cent so far this year, according to Centaline Property Agency's Centa-City Leading Index, which charts average sale prices of secondary flats at 100 large housing estates. The index showed prices for the week to August 19 climbed to a record high of 107.18, up from 95.47 on January 1 this year.
Brian King, manager at Headland Homes, which specialises in property trading in Discovery Bay on Lantau, said homes selling below HK$7 million had increased in price by between 15 per cent and 20 per cent on average this year.
On Lamma Island, flat prices had also increased by about 10 per cent this year, according to Jackson Property Agency Company's manager Jackson Ng Wah-fai.
The price rise could have been more significant if there were more houses available for sale, said Ng, but since there was a shortage of sellers not many deals had been transacted.
Agents believed prices on the islands would continue to climb, as they were still lower than those in other parts of Hong Kong.