Away from it all? Property sales on Lantau remain sluggish, but new developments may boost local values
Aside from some impressive high-end property sales, south Lantau’s prices continue to falter – but some experts remain confident about the potential for growth
Luxury homes have commanded high prices in south Lantau because of its serene beaches, greenery and pollution-free atmosphere.
Now, with hectic infrastructure and property development, property investors face two choices: buy into the island’s increasing infrastructure development; or cash in and find a potentially less-polluted rural retreat overseas.
The high-end Lantau “Riviera” is beginning to draw big money. Swire Properties last October sold a 2,586 sq ft house at its Whitesands development of 28, two-storey, three- and four-bedroom luxury homes next to the Cheung Sha roundabout for HK$66.6 million, or HK$25,754 per square foot. Sino Land made headlines in February, when it announced that it had sold six luxury homes at Botanica Bay, also in Cheung Sha, for a combined HK$740 million, or HK$24,837 per square foot. One 5,573 sq ft home reportedly exchanged hands for a record HK$164.45 million, or HK$29,508 per square foot.
However, south Lantau’s property scene seems to have taken a siesta as many Hong Kong markets falter. “It’s been been quiet for about six months this year, and picked up from July,” says Alice Leung of the area’s leading agent Findley Leung. “The property market is not very stable in Hong Kong, that’s why we are quiet too.”
A few years ago, “our yield was really good here, because prices grew a lot and rentals also rose”, Leung says. “The average yield in Lantau is around 3 per cent to 3.5 per cent right now, which is still better than the yield of Hong Kong properties.”
Selling prices are “still not really good, but rentals are picking up now”.
The agency advertises a diverse range of rentals: a 1,571sq ft luxury three-bedroom house with maids quarters at Golden Coast, in Cheung Sha, is offered for rent at HK$57,000 a month; a 655 sq ft three-bedroom sea-view flat at Sea Crest Terrace, Mui Wo, is going for HK$17,000 a month; commuter studios go for about HK$7,000 a month; and a 700 sq ft, two-bedroom home with roof in Tai Tei Tong is offered online at HK$16,500 per month.
Such comparative affordability draws newcomers to south Lantau “from Central, Mid-Levels, Sai Kung, Tung Chung and Discovery Bay”, Leung says.
However, Mui Wo has evolved from a village retreat for 5,485 people in 2011 to a dormitory suburb of largely gentrified small houses with sluggish broadband and a parking shortage. Worse, the township is largely a construction site, primarily for municipal works such as a waterfront walkway and cycle track; a civic square; and two Housing Authority Home Ownership Scheme development blocks for about another 2,000 people in 2017/18 at Ngan Kwong Wan Road East, and Ngan Kwong Wan Road West.
In the absence of updated population figures, residents say the town and its ferries seem busier. An April Legislative Council transport panel revealed the Central-Mui Wo ferries averaged 5,865 passengers per day in 2015, compared to 5,720 in a Lantau Development Advisory Committee (Landac) paper of November 2014.
But then south Lantau is being groomed as a tourism centre, and then as a potential landbank for Hong Kong.
The island’s once-quiet roads roads are beginning to buzz. The government’s “driving on Lantau Island” scheme launched in February enables 25 non-local cars and up to 40 tour coaches per day to enter the area’s previously closed roads.
Lantau’s “idyllic” image took a hit this year with reports of red tide in Silvermine Bay in March and a June marine waste disaster in Cheung Sha. Complaints about a shortage of plumbers, electricians and the length of schoolchildren’s commutes dampen the town’s appeal. Mui Wo’s isolation comes at a price, with potential buyers reporting that properties there have become expensive.
The market might be boosted by talk of an East Lantau Metropolis (ELM) in Mui Wo, which is expected to “accommodate a population of about 400,000 to 700,000” and is slated to be “one of the major sources of land supply in Hong Kong beyond 2030”, according to the Landac report in January. The project’s development details are unclear, but Leung says it could raise local values.
“I still think Lantau property prices have growth potential, and you can’t find any rural area with this quiet environment and convenience in Hong Kong,” Leung says.
Sino Group also says it is also “optimistic about the leasing market on the island”. Last month it launched Riverwalk, a lavishly gated “Shenzhen Georgian” low-rise development for 50 studio, one- and two-bedroom units ranging from 255 sq ft to 1,103 sq ft / 204 sq ft to 882 sq ft, respectively, where monthly rentals start at HK$8,800.