Highest monthly sales of new homes for 21 years in Hong Kong raise fears of ever higher prices
The number of residential property transactions priced at HK$12 million or more in April surged 72 per cent. The transactions were largely driven by the highest new homes sales in 21 years
Lengthy queues to secure new homes are expected to become even longer in the second half of the year if recent statistics are an indication of what’s to come in Hong Kong’s property sector.
Sky-high prices, a slew of government cooling measures and the seemingly imminent interest rate rise have failed to dent Hongkongers’ insatiable appetite for property.
Figures from the Land Registry, compiled by estate agent Centaline Property Agency, show that in April the number of residential property transactions priced at HK$12 million or more surged 72 per cent to 934 from March. The transactions were largely driven by new homes sales, which were the highest monthly sales in 21 years.
Towards the upper end of the market, the volume of luxury house sales rose 6.4 per cent in the first quarter of this year over the preceding quarter. At least 10 HK$100 million-plus, big-ticket deals were registered in the first quarter alone.
Last year, Hong Kong overtook London as the world’s top real estate market in the luxury sector, according to a report by Christie’s International Real Estate, as it registered four home sales priced in excess of US$100 million.
Mount Nicholson, a luxury project built by Wharf and Nan Fung, saw a detached 9,950 sq ft home sell for HK$1.08 billion late last year, reportedly bought by a mainland property tycoon.
On the south side of Hong Kong Island, Nan Fung is working on another prime luxury development. Located at Deep Water Bay Drive, the project is planned as a gated, secure community, close to about 2,700 hectares of country parks. The luxury properties in the development will likely be put on the market in the second half of this year, according to sources.
Another luxury project on the market is Mount Pavilia, a low-density development in Clear Water Bay by New World Development. It consists of 680 homes that range in size from 950 sq ft to 1,150 sq ft for three-bedrooms, and to 1,800 sq ft for four-bedroom units.
After selling more than 80 per cent of the Parc Inverness units, Chinachem is now marketing the luxury houses within the Kowloon Tong development. Kerry Properties is also hoping that buyers will continue to drive demand for family-sized homes priced anywhere above HK$25 million for its Beacon Hill project in Kowloon Tong.
Last October, Kerry Properties acquired the prime Beacon Hill site with a maximum gross floor area of 343,000 sq ft for HK$7.268 billion (HK$21,016 per square foot). It had earlier bought a nearby site with a maximum gross floor area of about 116,400 sq ft for HK$2.39 billion (HK$20,534 per square foot) in February 2015.
The luxury homebuilder said it would combine the two sites into a luxury project with a total gross floor area of close to 500,000 sq ft. According to Chu Ip-pui, executive director of Kerry Real Estate Agency, a unit of Kerry Properties, “the Beacon Hill development is being developed in two phases. The foundation of one of them has already been laid, and we are planning on the other site.
“We aim to sell the properties of the first phase in the first quarter of 2018, likely when they are completed. It will have two seven-storey apartment blocks, providing about 26 flats at about 1,700 sq ft each, as well as 19 houses that range in size from about 3,000 sq ft up to nearly 7,000 sq ft.”
The upcoming opening of the Hong Kong–Zhuhai–Macau Bridge and the government’s ambitious plans to develop eastern Lantau into a new metropolis has increased the confidence of property developers and buyers alike in southern Lantau property developments.
Swire Properties is now marketing two of the 28 luxury detached houses in its Whitesands development in southern Lantau.
Property consultant Colliers International is looking for a suitor to acquire and redevelop a private estate sitting on a 31,721 sq ft site in Mui Wo, Lantau, that it said has good redevelopment potential as luxury housing.
The site, now comprising 16 houses, has been permitted to be redeveloped into an 18-house site with the total buildable floor area capped at 28,274 sq ft, says Reeves Yan, an executive director of capital markets and investment services at Colliers International.
“Since we put the Mui Wo site up for sale for public tender in early May, we have received numerous inquiries from local and mainland developers and investors. That’s a testimony of keen interest the industry has for eastern Lantau as a new [central business district] in the future,” Yan says, adding that the tender for the site closes in mid-June.
Earlier in the year, the Hong Kong Monetary Authority, the city’s de facto central bank, tightened bank lending to property developers for land purchases and also tightened mortgage lending to borrowers with more than one existing mortgage, as it seeks to cool down a housing market that soared as much as 20 per cent in May from a year earlier.