Luxury villa at Hong Kong’s The Peak up for tender, could fetch as much as US$122.5 million

The 7,042 sq ft property at 8 Mount Nicholson Road has been developed by Wharf Holdings and Nan Fung Group
Luxury residential market expected to keep up momentum and post even stronger growth in the second quarter, Colliers executive says

Hong Kong property

Cheryl Arcibal

Published: 6:45pm, 5 Apr 2023

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A 7,042 sq ft villa at The Peak, Hong Kong’s most exclusive address, is up for tender on April 13, according to Wheelock Properties.

The property in the ultra-exclusive enclave of Mount Nicholson at 8 Mount Nicholson Road has been developed by Wharf Holdings and Nan Fung Group. Wheelock is the sole agent for the sale.

The attempt to sell the four-bedroom unit – expected to fetch as much as HK$961.5 million (US$122.5 million) – comes at a time of marginal improvement in Hong Kong’s luxury property segment on the back of a full reopening of the city’s and mainland China’s borders, the end of strict Covid-19 restrictions and the stabilisation of interest rates.

“The range of the price for the house could be anywhere between HK$86,340 and HK$136,544 per square foot, based on sales last year,” said Vincent Cheung, managing director of Vincorn Consulting and Appraisal.

Receivers of a luxury property on The Peak linked to Evergrande put it up for sale

Hong Kong’s residential market is seeing a marked improvement, with the number of transactions rising 40.3 per cent month on month to 4,282 in February, according to Knight Frank, which cited official data. Primary sales supported overall market sentiment, surging 80.4 per cent month on month to 655 deals. The overall home price index also rose by 0.6 per cent in January, according to official data.

The demand for property has surged in Hong Kong amid hopes that the city has reached a peak in terms of interest rate increases.

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The Hong Kong Monetary Authority in March raised the city’s base rate to a 15-year high of 5.25 per cent, after the US Federal Reserve increased its target rate by a quarter point to a range of 4.75 per cent to 5 per cent. However, Hong Kong’s major lenders did not follow suit. HSBC and Bank of China (Hong Kong) kept their best lending rates unchanged at 5.625 per cent, while Standard Chartered kept its prime rate unchanged at 5.875 per cent.

The pause in lending rates by the city’s three currency-issuing banks has boosted hopes that homebuying activity will continue to increase in the coming months, as mortgage rates are likely to stabilise. Sales of new and lived-in homes could hit 66,000 units this year, up nearly 50 per cent from 2022, according to market observers.

“Since the full border reopening earlier this year, the Hong Kong luxury residential market has seen signs of recovery across both transactions and leasing,” said Steve Lam, senior director, capital markets and investment services, Colliers Hong Kong. “Driven by mainland buyers, transactions in the primary market have gained momentum, with transaction prices holding up strongly.

Are China’s big spenders trickling back to Hong Kong’s home market?

“For example, a few new projects in Kowloon have recorded transaction prices of over HK$50,000 per square foot. The ultra high-end market has also seen improved sentiment, with multiple single-lot houses reaching final stages of negotiations. We expect the luxury residential market to keep up the momentum and post even stronger growth in the second quarter.”

Vincorn’s Cheung, on the other hand, pointed to some “sluggishness” in the luxury property market.

Earlier this year, a four-bedroom luxury home in Mount Nicholson resold at an estimated loss of about HK$130 million. The home, in one of the most expensive luxury developments in Hong Kong, set a record for Asia when it sold for HK$519.9 million in 2019. It sold on January 27 to a buyer named “Yu Ye” for HK$390 million, about 25 per cent below the price “Li Jun” paid for it, according to official records.