Hong Kong investors try to cash in their luxury houses as prices continue to soar

Hong Kong property investors are attempting to cash in their luxury houses for huge profits as the sector continues to perform spectacularly.

To capitalise on the rising prices of high-end homes, agents said more owners in Southern district, including Stanley and The Peak, are pondering taking profit from their long-term investments.

For example, a 2,060 square foot house at Hoi Fung Path, Stanley, which is estimated to be worth HK$220 million, recently came on the market, according to joint sole agent CBRE.

The price tag for the two-storey house, which has a private pool and 500 sq ft garden, translates into HK$106,796 per square foot, which would set a new record if a buyer is found.

The owner, a local businessman, had bought the house in 2002 for HK$16 million and lived there ever since.

Separately, a 2,903 square-foot house, No 20 at the luxury development known as Strawberry Hill, at 8 Plunkett’s Road on the Peak, is being offered for HK$190 million, or HK$65,449 per sq ft, said Jerry Yuen, associate director of CBRE’s Hong Kong capital markets.

“Prices for houses should continue to grow due to the scarce supply,” said Yuen.

He said the property at Hoi Fung Path could be purchased through company shares. If the transaction was done this way, the buyer would probably be asked to pay 0.2 per cent stamp duty instead of as much as 30 per cent.

There are just 280 houses with single lot numbers on Hong Kong Island, he said.

The asking price for a luxury property at Stanley was 25 per cent higher than another house at 2 Headland Road, Stanley, sold for HK$85,000 per sq ft in February last year.

It was close to the price of a house at No 1 & 3 Pollock’s Road on the Peak sold to High Grand, a private company owned by Yeung Kin-man and his wife Lam Wai-ying, for HK$2.8 billion, or HK$109,571 per sq ft on January 26. The couple are ranked eighth among Hong Kong’s 50 wealthiest people, with a combined net worth estimated at US$8.4 billion as of January, according to Forbes’ latest list of wealthy individuals and families in the city.

Koh Keng-shing, founder and chief executive of Landscope Christie’s, said houses - as opposed to apartments - accounted for less than 1 per cent of total stock in Hong Kong. Buyers tend to be more picky than those seeking flats, he said.

“Potential buyers of houses will look at the property’s location, size, design and Fung Shui before making a purchase decision,” said Koh. “In some extreme cases, it took them years to find their dream houses. Once they find a target, they have to pay whatever the vendor is asking.”

With home prices showing no signs of falling significantly, a survey conducted by Midland Realty said nearly 40 per cent of first-time buyers had needed financial support from their parents in the past five years.

Meanwhile, the number of transactions for apartments dropped 7.4 per cent to 3,286 deals last month from December, the Land Registry said on Thursday.

The total number of property transactions including apartments, shops, parking lots and industrial units, was 5,220 last month, down 25 per cent from December.