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Sandy Li

Recent record deals unlikely to affect mass housing market

The luxury residential sector in Hong Kong has continued to  perform spectacularly  with a series of transactions achieving further increases in capital values.

While agents say the recent record-breaking deals in luxury units  are unlikely to  have a knock-on effect on mass home prices, they hoped the boom in the sector  will strengthen buying confidence and drive up sales in the primary  mass  housing market.

Last week, a buyer set a record for luxury flats when he paid HK$128.2 million or HK$33,300 per square foot  for a 3,860 square foot penthouse with rooftop at Cheung Kong Group's Legend in Jardine's Lookout.

Earlier this month, one of the 22 houses at 8 Severn Road on the Peak, developed by Sun Hung Kai Properties, fetched a record HK$38,500 per square foot in Hong Kong's residential market.

Ivan Ho, the managing director of Ricacorp Properties, said the luxury residential sector outperformed  other sectors  due to limited supply.

'Many people have been lured to the luxury housing market in the last few weeks after  making a killing in the recent stock rally or getting higher salaries  due to the improved economy,' he said.

Although the luxury market has  become active,  Mr Ho believes the positive impact on the mass residential market is limited due to  abundant supply  that is expected to last through the next few years. He expects the gap between mass  and luxury residential prices to  widen more.

But agents said the property market  had regained much of its growth momentum after  a year of market consolidation, with  some cash-rich buyers paying record prices for luxury homes and new projects  springing up all over the city.

More than 10 new residential projects recorded brisk sales  at the weekend as buying confidence grew.

Colliers International research director Simon Lo Wing-fai said primary and secondary sales of residential units worth below HK$2 million  became the focus of activity after the government reduced the stamp duty to HK$100. But he said he had yet to see the spill-over effect of record prices set by the luxury residential market  on the mass housing sector.

Fredy Wu, the chief executive of Hong Kong Property (Services) Agency, expects to see a 30 per cent rise in transaction volume in the market for small to medium-sized flats.

But he said prices for mass  housing units would rise  3 per cent to  5 per cent this year,  against a double-digit growth for luxury homes.

'End-users  buy homes due to genuine demand and improved affordability rather than  because of one or two property transactions that  fetched record high prices,' he said.

At the weekend, about 400 new units with prices ranging from less than HK$2 million to HK$40 million each  had been sold,  a 50 per cent increase from a week ago,  agents said.

While SHKP sold 200 units at Manhattan Hill in Lai Chi Kok, buyers snapped up all 119 units at Henderson Land Development's mass residential development, the Verdancy in Yuen Long.

Bel Air Residence in Pok  Fu Lam also registered strong sales.

Shih Wing-ching, the chairman of Centaline (Holdings), the parent of Centaline Property Agency, said a strong rebound in the secondary market very much depended on whether buoyant sales in the primary market could be sustained for the next few months.

For the past few weeks, sales of new projects showed improvement  amid news  that some special units at select luxury residential projects  had been achieved high prices, he said.



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