Hong Kong luxury real estate is getting more expensive – again – as residential sales rebound in The Peak and Southside, according to Colliers and Habitat Property agents

Sep 6 , 2021

This detached, colonial-era house in South Bay is of a sort rarely seen on the market and offers wide views of Repulse Bay in the Southern district of Hong Kong Island. Photo: Habitat Property

Shouson Hill, Deep Water Bay, Repulse Bay, Tai Tam and Stanley are seeing strong demand for apartments with lots of space indoors and out – ideal for pandemic-era WFH

Southside is booming: development around Wong Chuk Hang MTR will produce 5,200 mid- to upper-end flats close to new A-grade commercial space and desirable international schools

Confidence is returning to Hong Kong’s luxury residential market, putting behind it a “considerable slump” that began in the second half of 2019.

New research from Colliers shows that activity began to pick up during the second half of 2020, with 20 top-end sales in the prime (homes worth more than HK$100 million) sub-markets of The Peak and Southern district, up 54 per cent year-on-year. Data collected from EPRC shows the surge has carried forward into 2021 with 30 transactions to date, a 500 per cent rise. Over the 12 months from July 2020 to June 2021, these sales realised a total of HK$12.8 billion, more than twice that (115 per cent up) achieved in the year before.

I haven’t seen this much confidence in the market in a long time, if ever

Victoria Allan, founder, Habitat Property

Thirty of these transactions took place in Southern district – Shouson Hill, Deep Water Bay, Repulse Bay, Tai Tam and Stanley – with 20 on The Peak.

View of Deep Water Bay and Repulse Bay beyond, with the surrounding hills, Southern district, Hong Kong Island. Photo: Shutterstock

Hannah Jeong, head of valuation and advisory services at Colliers, Hong Kong, believes softer pricing, along with the city’s economic recovery, are driving market confidence.

“The purchasing price for luxury residential property has become more attractive, now coming in at HK$80,000 to HK$100,000 per square foot, instead of HK$80,000 to HK$150,000 in 2018,” Jeong said.

“Amid growing optimism of Hong Kong’s economic recovery and the pandemic being brought under control, demand will remain healthy. We forecast a gradual price growth of three per cent for the second half of 2021.”

Jason Fung, senior associate director of valuation and advisory services at Colliers in Hong Kong, says market evidence suggests luxury flats have become a more attractive asset type compared to houses.

“Apartments offer more flexibility and require a lower lump sum consideration, comparatively offering more opportunities,” he explains. “Mount Nicholson is a prime example – the mixed product offering of both houses and apartments has seen the latter achieve higher unit rates and expedited take-up.”