Accent on design as luxury homes go back to nature
Faced with a market under pressure, developers are rethinking their approach to the luxury sector, with an emphasis on creating homes that feel right.
Walk through some of the new developments on The Peak or Island South and you will note some big changes from previous years.
The spaces feel bigger, have better internal layouts, and are more sensitive in the use of materials and design, FPDSavills senior director Frank Marriott said.
'What we have seen over the past couple of years is that the quality that developers are delivering these days is of a much higher level,' he said.
'They are being much more thoughtful in terms of design and layout, and the efficiency of the product.'
The design emphasis has shifted from 'showy' homes with marble inlay and black and gold trim to more organic environments that emphasise earth tones and harmonious flow.
'People want a better layout, not necessarily lots of marble and flashy items,' Mr Marriott said. 'They want more natural kitchens, more wood, more green.'
He said developers were tending to construct on a larger scale.
'The vogue is to build bigger houses and less of them so as to provide buyers with a much better standard of living, much less density,' he said.
Up to 10 luxury housing projects are expected to be completed in Southside Hong Kong Island and The Peak this year. It is unclear, however, if developers will sell or lease the properties.
Developers have been holding back properties from the general market in recent years, preferring to lease until market conditions improve.
Overall luxury prices declined 8 per cent last year, while rentals declined 13 per cent. Mr Marriott forecast that declines would continue this year roughly in line with last year's figures. However, he expects a rebound next year.
Confidence in the luxury sector has been shaken in recent years, but deep-pocketed developers should provide a floor to deflating values, Mr Marriott said.
'It shows the strength of Hong Kong developers, because the oversupply of luxury residential at the moment is down to the fact there are half a dozen blocks in Mid-Levels and The Peak and so forth that are owned by the top-end developers, and these were probably earmarked for sale,' he said.
'However, because the sales market has languished, developers don't want to sell them at what they consider cheap prices. So they are going to hold them for the mid- to long-term until the market picks up.
'A developer should be able to get a 10 per cent to 20 per cent premium if the product fulfills the purchaser's wishes,' he said.
According to a recent survey, 7 per cent of homes are 1,000 square feet or larger. There are an estimated 2,500 units larger than 3,000 sq ft.
'Hong Kong probably has one of the smallest luxury markets in the world,' Mr Marriott said.
But China's admission to the World Trade Organisation and Hong Kong's greater economic integration with Guangdong would provide a framework for a rebound, he said.
