Hong Kong’s south side remains a draw for those looking for luxury homes. “Deep Water Bay is reputed to be the wealthiest neighbourhood on the planet, being home to the city’s most successful business leaders, with an aggregate net worth of over US$120 billion,” says Geoffrey Lo, general manager of the property development and sales departments of Nan Fung Development. Not surprisingly, Deep Water Bay is also where quite a few of the city’s exclusive private clubs are located, including Crown Wine Cellars, the Hong Kong Golf Club, Aberdeen Marina Club and Hong Kong Country Club. Originally the Central Ordnance Munitions Depot, Crown Wine Cellars, was declared a Unesco Asia-Pacific Heritage Site in 2007 for its historical significance. Last year, Nan Fung Group and Vervain Resources unveiled a luxury residential project in the area, known as 8 Deep Water Bay Drive. It is designed as 52 low-density units of private, spacious and tranquil residential homes. “Located in one of the most prestigious neighbourhoods in Hong Kong, this rare site is cradled by the natural beauty of southern Hong Kong Island, commands a high level of privacy, and has a picturesque view of surrounding mountains and country parks during the day while overlooking the breathtaking valley and city lights on the horizon in the evening,” says Lo. The area is surrounded by country parks and has a natural panoramic view encompassing Brick Hill, Violet Hill, Mount Nicholson and Mount Cameron. The apartments range from three to four en-suite bedroom units with saleable areas from 2,865 sq ft to 4,214 sq ft. Each apartment has a private lift lobby. “The property market on Hong Kong Island has been characterised by land constraints and limited availability of homes. Luxury homes, typically town houses of 3,000 sq ft and above, are concentrated on The Peak and the south side,” says Simon Smith, senior director of research and consultancy at real estate adviser Savills. Smith says there is still strong demand from end users, people who are looking to buy to live in rather than use as an investment. “Prices remain high, with a cautious view particularly in the top end of the market. The underlying factors aren’t helping either,” says Smith. Investor sentiment in the business and technology sector has been dampened by the US-China trade war that has continued since last year. The protests in Hong Kong have also caused some hesitation on the part of those looking to invest here. And that has trickled down to the property market. “Industrialists, and increasingly tech entrepreneurs, are the cash-rich who would typically fit the profile of people looking to buy in the area. And they are also the ones whose businesses have faced challenges due to current conditions,” says Smith. Though there have been queries from those quarters about other property markets in Singapore, Canada and the UK, Smith believes there is only “a slight turn towards those markets” and there has yet to be any significant capital flight from Hong Kong. The allure of markets such as the UK, where the pound has fallen due to Brexit, is likely to be the pull factor. “Singapore is also seeing plenty of interest from Hong Kong but this has not yet translated into actual moves,” says Smith. Smith believes things such as “negative loan interest rates, a supply that holds its value and enough liquidity in the system” here should also cancel out any push factors. “Luxury leasing demand has held up surprisingly well, but rents have begun to buckle nonetheless. Serviced apartments have been challenged hard by competitive hotel room rates at the top end,” he says. He also thinks that development rates in the south will continue as planned. Though the price of commercial spaces in Hong Kong has taken a beating, there is still demand for them on the south side. Some have chosen the area due to its varied demographic. “We chose One Island South as it is an extracurricular hub as well as being in a strategic location for our kids’ programmes with a lot of the south side schools,” says Vee Lea, co-founder of movement training centre Trybe, which is located in Wong Chuk Hang. An improved transport system has also brought more people to businesses in the area. “The opening of the South Island MTR Line solidified it for us as it meant an easy commute into Wong Chuk Hang,” says Lea. Reduced prices of commercial sites might bring even more life and businesses to the south side. Savills says that non-residential transaction volumes fell 57 per cent in July and August, following a 48 per cent year-on-year decline in the first half of the year. “With the business environment becoming more challenging, any sustained period of vacancy might test commercial landlords’ willingness to maintain asking prices, and on current evidence, office landlords seem more receptive to price reductions than their retail counterparts,” says Peter Yuen, managing director and head of investment and sales at Savills. “If global and local economic conditions continue to worsen, we may see more price adjustments over the next few months, and possibly a heavier fall in the office sector than in the retail sector.” Given its scenic setting, residential space in the south has retained its strong appeal despite these trying times. “With an idyllic environment with greenery, a high degree of privacy and exclusivity, Deep Water Bay Drive balances a peaceful and private lifestyle with the hustle and bustle of life in Hong Kong,” says Lo.