Demand for homes in frontier town Sha Tau Kok rises after government unveils plan to develop Northern Metropolis near mainland China border

Home prices in the border town could jump by up to 10 per cent in the next six to 12 months, according to Charles Lee, co-founder of STK 1 Properties
The town has already enjoyed a stunning rally in property prices over the years, easily outpacing the wider market

Hong Kong property

Lam Ka-sing

Published: 9:30am, 27 Oct 2021

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Properties in Sha Tau Kok, a sleepy town in the far north of Hong Kong, have enjoyed a spurt of popularity after the government unveiled plans to develop the northern New Territories.

Home prices in the frontier town could jump by between 5 and 10 per cent in the next six to 12 months, according to Charles Lee, the co-founder of local agency STK 1 Properties and a Sha Tau Kok resident.

“More people have been looking for homes [here],” said Lee, who has observed a greater sense of optimism about Sha Tau Kok’s growth potential.

Only Sha Tau Kok residents are permitted to buy homes in new projects such as Marin Point, because of the town’s special status as a frontier closed area, or divided border town.

But buyers of older homes, and renters, can get permits to live there once they have made the transaction and obtained the property’s title deed or rental agreement, said Lee.

Hong Kong’s border area with mainland China is to be built into a new Northern Metropolis of 2.5 million people over the next 20 years, including a “Silicon Valley” that will closely interact with neighbouring Shenzhen, according to a blueprint laid down by Chief Executive Carrie Lam Cheng Yuet-ngor in her policy address earlier this month.

The scheme, repackaged and expanded from an existing new town plan, is seen as a major strategic change for development, moving the centre away from Hong Kong Island to the north, to integrate the city into the latest national development plan.

The news had an immediate effect on demand for houses in the isolated town that has always been a popular retirement destination, according to Lee.

For example, a flat measuring 400 square feet in an old tenement building at the centre of the bordered zone that had been listed for four months was snapped up shortly after Lam’s announcement for HK$2.3 million (US$295,865), or HK$5,750 per sq ft. That is about two thirds cheaper than the average HK$16,886 per sq ft across Hong Kong, according to Midland Realty data.

According to the police data, the population of the Sha Tau Kok Closed Area was about 4,000 as of December 2020.

The town has already enjoyed a stunning rally in property prices over the years, easily outpacing the wider market.

Home prices have tripled in the last five years and are four to five times higher than they were a decade ago, said Lee. By comparison, Hong Kong’s overall lived-in home prices have increased by about 1.15 times since August 2011, according to data from the Rating and Valuation Department.

The flat that Lee bought for some HK$1 million in 2011, measuring 1,100 sq ft with rooftop, is now estimated to be worth HK$5.5 million, or HK$5,000 per sq ft.

It is still cheaper than homes in the Yantian district of Shenzhen across the border, which is about half an hour’s walk from Sha Tau Kok. Yantian has an average new home price of 64,800 yuan (US$10,153) per square metre, or HK$7,331 per sq ft, according to data from Anjuke, a property agency.

The nearby districts of Sheung Shui, Fanling and Kwu Tung have an average price per sq ft of HK$11,877, according to data from Centaline Property Agency, about double that of Sha Tau Kok.