Hong Kong is Asia’s busiest ‘super-prime’ housing market as removal of property curbs boosts demand: Knight Frank report

With 132 transactions in the year to March, Hong Kong beat Singapore, which recorded 88 deals in the ‘super-prime’ residential market
Demand was supported by a drop in prices in the last few years and the recent scrapping of cooling measures

Hong Kong property

Cheryl Arcibal

Published: 7:00am, 4 Jun 2024

Why you can trust SCMP

Hong Kong was Asia’s busiest market for homes valued at US$10 million and above in the year to March, according to a Knight Frank report.

With 132 transactions between April 2023 and March this year, Hong Kong beat its main rival, Singapore, which recorded 88 deals in what the property consultancy referred to as the super-prime residential market. Deals in Hong Kong’s ultra-luxury housing sector were worth US$2.8 billion in the period, while those in Singapore came to US$1.2 billion.

Globally, Hong Kong came in third, behind Dubai which saw 397 deals worth US$6.72 billion and Geneva with 110 transactions worth US$2.9 billion.

“Demand in Hong Kong is mainly coming from Hong Kong buyers or from mainland Chinese purchasers,” said Liam Bailey, global head of research at Knight Frank, in an email interview after the release of the report on Monday. “The uptick reflects a feeling in the market that pricing has adjusted down in the prime and super-prime markets over the past 18 months.

“There is also an ongoing issue with low supply volumes of best-in-class stock, which is supporting prices.”

13:00

How Hong Kong's housing market became among the world’s most unaffordable

Hampered by a sluggish economy and high interest rates, Hong Kong’s residential market was down by as much as 24 per cent in February this year from its peak in September 2021, according to an official index tracking the prices of lived-in homes.

As of April, prices had clawed back some losses, narrowing the gap to 22.5 per cent, data from the Rating and Valuation Department showed.

Among the luxury homes sold in Hong Kong this year was a mansion at The Peak. Bought by a mainland Chinese buyer linked to the founder of Mindray Bio-Medical Electronics in January, the property at 25-26 A&B Lugard Road was snapped up for HK$838 million (US$107 million), according to Savills Hong Kong, the sole agent.

The removal of all the city’s property cooling measures at the end of February is also boosting transactions in the luxury homes market, Bailey added.

“The recent moves to reduce transaction taxes in the housing market have also aided confidence across the market,” he said. “Hong Kong remains a critical business centre and wealth hub in Asia and the recent volumes of super-prime sales is likely to be sustained into the medium term.”

Singapore is in a completely different phase of its cycle, with the government cooling home prices with punitive levies. Measures announced by the city state last year included a 60 per cent tax on residential purchases by foreign buyers.