Hong Kong hotel operators mull converting their properties to residential buildings as home prices defy the economic downturn

The applications for conversion of two hotels – the Horizon Suite Hotel in Ma On Shan, and the Novotel Nathan Road Kowloon – to residential use were approved by the Town Planning Board on Friday.

The approvals will add more than 1,000 new flats at a time when home seekers are regaining confidence in anticipation that the Covid-19 vaccination will help revive the economy, according to property agents. Sales of new and used homes saw something of a mini-boom in January.

“Hong Kong’s property market has proved resilient even with the city gripped by the anti-government protest from mid-2019, and a year-long Covid-19 pandemic,” said Raymond Cheng, head of Hong Kong and China research at CGS-CIMB Securities.

Centaline expects sales of lived-in homes to have reached a seven-month high of 4,000 in January.

Sales of new flats are likely to have surged by 164 per cent to more than 1,500 in January, from just 569 deals the previous month, it said.

The strong sales lifted prices of second-hand homes by 0.13 per cent in January, ending three straight months of declines, according to data provided by the Rating and Valuation Department. The index was still down by 4.3 per cent from a record high in May 2019.