Concrete Analysis | Hong Kong’s property market – an amalgam of micromarkets
Hong Kong is not one monolithic market but a collection of micromarkets – each subject to its own trends, developments and forces
The question I am asked most often as an agent is “How’s the market?” The answer is that Hong Kong, more than most world capitals, is not one monolithic market, but a collection of micromarkets, each one subject to its own trends, news items and forces.
Tung Chung is an example of Hong Kong’s multiple market forces brought to bear on one “New Town”, the local phrase for a satellite suburb built from a whole piece of cloth. Once a distant home for pilots and airline staff, this former Lantau fishing village has become a magnet for young families with kids drawn to their parks, and retirees seeking a quieter lifestyle. Investors love Tung Chung for the new infrastructure that includes a second MTR stop and the longest seabridge in the world (currently billed as such, pending other such bridges around the region).
Sai Ying Pun is another example of a micromarket, though the other side of the coin. An old neighbourhood in the Western District of Hong Kong Island, Sai Ying Pun went from local storefront diners and auto repair shops to bistros, wine and art galleries as a result of a strategically placed MTR stop and recreationally positioned escalator.
In the years running up to the opening of these infrastructure projects, the investor activity included genuine gentrification with well-appointed roof top lofts, and also more mercenary property flip investors, i.e., buyers who would spot under market flats, acquire and sell the next day for profit.
Between the auto shops and the art galleries came such middle market vendors as pet and tuition centres, but even these harbingers of good real estate fortune are being swept out by higher rents.
On the rental side, Star Street in Wan Chai is an example of a micromarket next to another micromarket. This leisurely and low-density necklace of leafy streets is higher priced for a reason, and has maintained its lofty rent levels despite an onslaught of cheaper price points from a nearby estate, The Avenue.
