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Hong Kong’s supply of luxury homes to hit new high after demand from wealthy buyers more than doubles amid Covid-19
- We have seen more transactions in second half of 2020 to first half of this year despite the coronavirus pandemic, Colliers executive says
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The supply for luxury homes in Hong Kong’s ultra-exclusive neighbourhood of The Peak is likely to hit 404,000 sq ft in 2024, the highest level since 2016, after demand boosted sales of mansions and high-end flats in the district by more than double to HK$12.8 billion (US$1.6 billion) in the 12-month period ending in June, according to Colliers.
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“We have seen more transactions in the second half of 2020 to the first half of 2021 despite the [coronavirus] pandemic, as prices have become more attractive,” said Hannah Jeong, head of valuation and advisory services in Hong Kong at the property consultancy. The prices of luxury residential properties are currently in the HK$80,000 to HK$100,000 per square foot range, she added.
“We forecast a gradual price growth of 3 per cent for the second half of 2021,” Jeong said.
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The recent flurry of initial public offerings (IPOs) on the Hong Kong and Shenzhen stock exchanges is boosting property sales in the city, as top executives of mainland Chinese companies look for properties to invest in. From last year to the first half of this year, there were 180 IPOs in Hong Kong, raising more than HK$600 billion in fresh capital and bringing a new wave of high net worth individuals into the Hong Kong market, who are likely to buy luxury residential properties.
Luxury homes are residential properties that cost more than HK$100 million, or more than HK$100,000 a month in rent. Average luxury homes were priced ranged between HK$80,000 and HK$150,000 per square foot previously. For instance, in 2016, a 9,212 sq ft property at 15 Gough Hill Road on The Peak sold for HK$182,370 per square foot, making it the most expensive home in Asia.
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