By Zackary Wright, Executive Director, Asia Pacific, Christie’s International Real Estate
Hong Kong is one of the world’s most exclusive and desirable property markets, thanks to its status as a global economic hub. The country has consistently attracted interest from international buyers, particularly wealthy mainland Chinese investors as well as those hailing from Europe, Asia and India.
However, the property market plateaued in 2015, a trend which has continued into 2016. This adjustment has been fuelled by government measures implemented in an attempt to slow the market in response to soaring property prices and high inflation caused by an influx of cash into the city’s property market.
The Hong Kong government imposed three measures between 2012 and 2013, which have now taken full effect and have seen luxury property transactions in 2015 drop by more than 12 percent. These policies included the expansion of stamp duties on those who resell their property quickly and a 15- percent levy on both corporate buyers and non-permanent residents who require a visa to live, work or study in the city. A double stamp duty on all properties costing more than HK$2 million was also introduced, excluding those bought by permanent residents who are either first-time buyers or are selling their only home to buy another. Further contributing to the slowdown is the fact that many buyers still remain priced out of the market, as average current prices in Hong Kong remain at around HK$38,000 – HK$45,000 per square foot, with new build properties and lot sales achieving even higher prices.
Despite measures to cool the sector, there have been a number of notable sales at the top end of the ultra-luxury market. Hong Kong’s record-breaking $194 million top sale in 2015 demonstrates that high-net-worth individuals continue to recognize the long-term value in the purchase of prime property in prized international cities. The sale to a mainland Chinese investor also broke Asia’s record for the most expensive home by square foot (HK$151,653 per square foot). Christie’s International Real Estate’s Luxury Defined report named Hong Kong as the second top-performing luxury market.
The most desirable location continues to be The Peak, the highest point on Hong Kong Island, offering unparalleled views of the city below and across Victoria Harbour. Purchasers here are primarily Chinese billionaires and wealthy locals interested in both new luxury developments and existing landmark residences. Christie’s International Real Estate’s affiliate, Landscope, for example, is selling a 4-four-bedroom apartment for HK$68,000,000. A four4-bedroom house complete with a private garden and swimming pool for HK$420,000 a month is also listed with Landscope.
Although the property market in Hong Kong has slowed as a result of government measures, a number of significant sales and continued international interest does not indicate an overall collapse or lack of confidence in the top -end of the luxury market. Additionally, with prices falling, this could present an opportunity for astute buyers who are looking to invest their money and own a piece of prime real estate in this colorful metropolis.
About Christie’s International Real Estate
Comprising the world’s most qualified real estate specialists in the luxury residential sector, Christie’s International Real Estate is an invitation-only Affiliate network. The company has offices in London, New York, Hong Kong, Los Angeles and Palm Beach, with 140 global affiliates in 46 countries, including Beverly Hills affiliate, Hilton & Hyland.
Established in 1995, Landscope Realty enjoys an excellent reputation and leading position in the luxury property market in Hong Kong. It possesses the most comprehensive database of 120,000 affluent clients and prides itself in employing highly regarded staff with average sales experience of over 13 years.