Hong Kong retains world’s top luxury prime housing market tag for second year on Chinese demand
The city’s stratospheric luxury property market might soon be overtaken by other global hotspots such as Los Angeles
Hong Kong’s stratospheric luxury property market might be overtaken by other global hotspots such as Los Angeles this year in terms of total sales value, according to Christie’s International Real Estate.
“Every year Hong Kong sets the world record for luxury sales [by transaction value], but that may not hold true this year,” said Zackary Wright, the company’s executive director for APAC and Western North America.
“This is not because Hong Kong is slipping, but because there are a couple of other markets that are very strong, like Los Angeles.”
Los Angeles is home to the world’s most expensive residential property – a mansion called “The One” located in the exclusive Bel Air neighbourhood, which is due to go on the market in mid-2018 for US$500 million (HK$3.92 billion).
Christie’s defines any residential property worth US$1 million or above as a luxury home.
The average price of a luxury home in LA at the end of 2017 was US$2.5 million, not far behind Hong Kong’s average of US$2.8 million, according to a recent report by Christie’s.
But the highest Los Angeles luxury property prices last year fell well short of Hong Kong’s premium properties, especially in The Peak neighbourhood.
The most expensive property sold in LA last year went for US$88 million, while Hong Kong boasted the world’s first and second most expensive home sales of 2017, fuelled by mainlanders seeking to hedge against yuan depreciation by buying “trophy homes” in limited supply.
Because of this, the report named Hong Kong as the world “most luxurious” prime housing market for the second year running.
Pollocks Path Estate on The Peak was sold for a record-breaking HK$2.8 billion (US$360 million) to technology manufacturing tycoon Yeung Kin-man in January 2017 while two units in the Mount Nicholson development sold for HK$1.6 billion (US$149 million) in November.
More recently, another house on The Peak changed hands for HK$1.39 billion (US$177.3 million) in March – making it Asia’s second most expensive property on a square foot basis.
The international luxury housing market saw a rebound in 2017 as prices jumped by 11 per cent after stagnant growth in 2016, the report found.
The world’s “hottest” or fastest-growing luxury primary housing market is Victoria, British Columbia, according to the report. It is a mere four-hour car journey from Vancouver, already home to large immigrant communities from China, Hong Kong and Taiwan.
Japan and Hawaii are also popular destinations for Asian investors looking to buy luxury second homes, said Sonny Saito, chief executive of Japan Capital Realty, a subsidiary of Christie’s International Real Estate.
“Hong Kong and mainland Chinese investors are particularly keen on the US West Coast, Seattle and, increasingly, Thailand,” said Saito.
But there are also signs of a diminishing appetite for “trophy” homes more generally worldwide. Only three residential properties sold for more than US$100 million in 2017, the report said.
The world’s 10 most expensive homes sold for a combined US$1.24 billion last year, lower than the 2016 figure of US$1.32 billion.