Island West ticks all the right boxes for young families and property investors
Popular for its school catchment zones and proximity to the central business district, the area is a favourite spot for mainland Chinese immigrants and expats
Island West, stretching from Central to the far reaches of Pok Fu Lam, has seen residential prices skyrocket in recent years, mainly because of investor interest and smaller units which attract families of three or four.
School catchment zones and connectivity to the central business district, among other factors, continue to attract buyers to new projects, according to estate agents.
“New homes have continued to sell well because of their proximity to some of the city’s best schools, Central and the ... new MTR line, all of which appeal to a diverse tenant pool of families, expats and international students,” says Billy Chow, a district director at Ricacorp Properties.
Chow says that he has observed around 70 per cent of new homebuyers are investors, with the rest being smaller families seeking access to a good international school for their younger children.
“Demand from new immigrants, mostly from the mainland, who have just obtained permanent residency, is strong,” he says. This is mainly because they like to live near their work place and are very motivated to send their children to international schools.
“They qualify as first-time buyers if they hold no other properties in Hong Kong and therefore are exempted from most stamp duty surcharges,” Chow says, listing another point to explain the popularity of the area.
Steady demand for small units from investors and small families continues to motivate developers to build micro apartments.
A popular project in the market is 63 Pokfulam being built by Kowloon Development. The project is expected to be completed in December 2019. It will provide 350 units, including 100 studios, 225 one-bedroom, and 25 three-bedroom units at 494 sq ft.
According to Land Registry records, 11 sales were completed at the 63 Pokfulam project as of August 18, with prices averaging HK$30,129 per sq ft.
New World Development is also expected to officially launch the Artisan House development in Sai Ying Pun within this year. It will provide 250 units, mainly laid out as studios, one- and two-bedroom units. It is located close to Sai Ying Pun MTR station.
The developer says Artisan House is the latest in a series of the Bohemian portfolio, which focuses on infusing art and design into everyday living, following the successful launches of Eight South Lane and Bohemian House. Prices for the new homes have yet to be finalised and announced.
New residential projects that will likely come on stream off plan later this year include a Sun Hung Kai Properties development at 97 Belcher’s Street, which will provide 128 flats, according to Buildings Department records.
Nearby, Henderson Land has two projects under construction. They are located at 450-456G Queen’s Road West, Sai Ying Pun, and Chung Ching Street, Sai Wan, providing 600 flats and 192 flats, respectively.
In the secondary market, activity remains suppressed by the raft of tightening measures, especially lower loan-to-value ratios imposed on homes valued at above HK$7 million, Chow adds.
“Most properties listed for sale in this district usually command a price tag of above HK$7 million and HK$10 million thresholds. Buyers of more expensive homes even for self-occupation have to set aside more cash for [a] down payment.”
The Belcher’s, just off Pokfulam Road, and The Merton on the harbourfront of Kennedy Town are the two most sought-after residential complexes, as they provide a more diverse layout mix and more facilities, Chow says.
Smaller apartment complexes such as University Heights and Academic Terrace are also gaining in popularity.
Future housing supply in Island West will continue to come from redevelopment activities.
The Urban Renewal Authority (URA) has recently announced a regeneration scheme that it says will provide about 165 new flats while improving the living environment of an old neighbourhood in Sai Ying Pun.
The URA-led redevelopment plan, which commenced last month, covers about 12,000 sq ft of site area spread across Sung Hing Lane, Des Voeux Road West and Kwai Heung Street.
Scheduled for completion around 2026 and 2027, the development will supply about 90,000 sq ft of residential floor space, or about 165 flats, as well as about 4,300 sq ft of retail space.
The flats will be laid out as 400-500 sq ft in six- to eight-storey blocks. More open space will also be provided in the area with access to a nearby playground.
Acquisition activity in old buildings with redevelopment potential will continue to play an important role in the reshaping of the Island West cityscape, say property agents.
For example, a six-storey mixed-use block at 24 Mui Fong Street has seen five units sold in a series of transactions to the same entity for HK$31.9 million. Tai Hung Fai Enterprise has also reportedly purchased over 80 per cent ownership of an old building at 99 Des Voeux Road West for HK$210 million.