Dramatic transformation: Aberdeen housing market poised to take-off thanks to MTR’s new South Island Line
Completion of major transport infrastructure means the district is set to evolve from an old industrial town into a hub for business, innovation and the arts
Before the turn of the century, Aberdeen, like Kwun Tong of yesteryear, was pretty much an old and unattractive industrial town, largely ignored by developers and relatively isolated from the rest of Hong Kong.
How things have changed. The opening of the MTR’s South Island Line (East) later this year and the development of Wong Chuk Hang as a business hub is poised to inject life into the area’s housing market.
Positive sentiment towards the new MTR line has been reflected in the rapid price growth over the past five years, during which average home prices in Aberdeen and Ap Lei Chau since 2010 have grown 63 per cent to HK$8,865 per square foot.
After a flurry of sales between 2010 and 2014, including the launches of H Bonaire (Henderson Land), Larvotto (Sun Hung Kai Properties, Kerry Properties and Paliburg Holdings), Marinella (K. Wah, Sino Land and Nan Fung), new housing supply has been relatively subdued since last year.
With less than 50 units available for sale by the end of June, the H Bonaire development offers 106 flats, including 104 standard units (320-675 sq ft) and two special units (952-959 sq ft, excluding outdoor space). The project is earmarked for completion in early 2017.
Larvotto, located on the Ap Lei Chau waterfront opposite Sham Wan, was completed in 2010 and comprises nine towers. Marinella, which faces the Aberdeen Marina Club, is a six-tower development and was built in 2012.
Kowloon Development is marketing the remaining units at the South Coast project in Tin Wan, Aberdeen, which is expected to be delivered by the end of this year.
Launched in June last year, the project consists of 150 units, six on each floor, and features clubhouse facilities such as swimming pools. The flats are configured as studios, one-bedrooms and two-bedrooms, measuring 214 to 478 sq ft.
About 80 units had sold by the end of June, according to Terence Yang, general manager of sales and marketing at Kowloon Development. In addition to young couples or newlyweds, he estimates about 60 per cent of the buyers are buy-to-let investors looking to benefit from the development of Wong Chuk Hang as a new office district.
In the near term, new office developments such as 38 Southside, 41 Heung Yip Road and 8-10 Wong Chuk Hang Road will supply about 1.9 million sq ft of floor space to Wong Chuk Hang, according to property consultant DTZ/Cushman & Wakefield.
“The new MTR line, which includes a station in Wong Chuk Hang, has spurred significant commercial real estate development in the area, transforming it from an old industrial town into a hub for business, innovation and the arts,” Yang says.
The new business district is well placed to attract businesses as the journey from Central to Wong Chuk Hang will be cut to only 10 minutes after the new rail service opens.
“We expect to see stronger rental demand for quality homes from executives, including expats, who work around the area,” Yang adds. “There are many public transport routes connecting Tin Wan and Wong Chuk Hang, making it very convenient to commute.”
He is confident that the remaining units at the South Coast project will sell out quickly. The developer offers mortgage plans with loan-to-value ratios of up to 80 per cent. Homebuyers enjoy an option to extend the repayment period by two years.
Lily Wong, an associate director at OKAY.com, an estate agent, says lower rentals in Aberdeen attract some expats, but it is not as popular as Mid-Levels, Kennedy Town or Wan Chai.
“Most existing private homes in Aberdeen are high-rises with smaller living space, tiny balconies and little or no open space,” she says. “They are not very appealing to expat tenants.” She says Larvotto and Marinella, which offer larger family homes, balconies and comprehensive clubhouse facilities, are the exceptions.
“Expats might be more willing to consider renting a home in Aberdeen after the South Island Line begins operations, which will help ease the traffic bottleneck of the Aberdeen Tunnel, especially during rush hours,” Wong says.
In 2014, the government agreed to build the South Island Line (West), scheduled for completion no later than 2026, to cover Wong Chuk Hang, Aberdeen, Tin Wan, Wah Fu, Cyberport, Queen Mary Hospital and the University of Hong Kong.