Record prices for luxury flats in Hong Kong’s North Point unlikely to boost whole area

Record prices have been set at a luxury flat development in Hong Kong’s Island East district recently, thanks to strong demand, but there is unlikely to be a knock-on effect on other property in the area, where the housing stock is much older, analysts said.

Developer Sun Hung Kai Properties sold four units at its Victoria Harbour development in North Point on Friday, with one, the 1,585 sq ft Flat 11A in Block 1, selling for HK$102.8 million (US$13.2 million), or HK$64,887 per square foot, a new record in terms of square footage for the Island East district, according to the Sales of First-hand Residential Properties Authority.

But the high prices are unlikely to significantly boost values of other property in the area.

“The project is unique because of advantages such as its relatively low density and proximity to the MTR station, shopping malls and hotels. In contrast, other housing estates in the area are too old to sell for similarly high prices,” said Derek Chan, head of research at Ricacorp Properties.

For instance, the price per square foot of Flat 26B at Block 10 at the 32-year-old City Garden, a housing estate near the Victoria Harbour development, was HK$15,576 in a transaction on Wednesday, more than four times lower than its luxury neighbour, according to Midland Realty.

The outlay of HK$102.8 million for the Victoria Harbour unit would buy a 2,429 sq ft flat at Twin Brook in the prestigious southern district of Repulse Bay, according to a listing at Landscope Christie’s International Real Estate.