Repulse Bay parcel could fetch HK$1b

HONG KONG: Surging house prices in the luxury sector have encouraged owners to put top-priced properties up for sale — with a Repulse Bay property likely to carry a price tag of about HK$1 billion (RM409.95 million), according to agents.

The owner of the five-storey detached house and an adjacent five-storey residential block at 20 and 22 South Bay Road in Repulse Bay has appointed property consultant Knight Frank to sell the parcel of luxury properties by tender. Closing date for offers is August 18.

The buildings are on a combined 20,723 square-foot site that provides a total floor area of 37,324 sq ft, including open area. The site was bought for HK$130 million or HK$6,970 per sq ft at a government land auction 10 years ago.

A property agent said that following the strong growth in luxury residential prices the two properties could fetch a combined HK$1 billion or HK$53,616 per sq ft.

Another luxury residential property up for tender is house number 26 at Le Palaris in Tai Tam. The two-storey house has a gross floor area of 4,372 sq ft and an 840 sq ft garden. The tender will close on August 12.

A 12,318 sq ft house at Jardine's Lookout is also offer for sale at HK$400 million or HK$32,000 per sq ft.

Keith Chang, deputy senior director of the residential department of property agency Savills said the last deal done in the housing estate was in September last year when a house sold for HK$96 million, or HK$21,622 per sq ft — suggesting a possible price for the latest home on offer of between HK$110 million and HK$120 million.

The vendors of house number 26 bought the property for HK$55 million in 2001. "They have decided to sell the property because market sentiment is good," Chan said.

Clarence Chow Ho-yin, associate director at Centaline Property Agency, said an increasing number of owners were now willing to sell their luxury residential properties because prices had risen to high levels.

According to the firm, prices of luxury houses on The Peak and Island South have risen by 20% and more than 10% respectively so far this year.

"There are two types of vendors selling luxury residential properties currently. One is 'old family' that wants to cash in assets for estate allocation. The other is motivated by the profit that can be made at present prices," he explained.

Contributing to the high prices, said Chow, was the limited supply.

"I don't think you will be able to find another new site available for luxury residential development in Island South in the next 20 years. But demand is strong. The entry price for a single house in Island South has risen to HK$600 million," he said.

Property agents are now hoping the upcoming land auction of the site at Mount Nicholson Road on The Peak, and the former Civil Aid Service Training Centre in Ho Man Tin will record good responses.

But Landscope Realty managing director Koh Keng-shing worried that sales volumes could fall under the weight of rising prices.

"Flat owners may raise their asking prices sharply if the land auction result is positive and that could keep potential buyers away from the market in the short term," he said.

China buyers could possibly be counted on to remain a major driver of demand as long as the China economy continued to grow strongly, said agents.

"They have continued to look for luxury properties in Hong Kong in last few months," said Alvin Yip, co-head of the investment department of property consultancy DTZ in North Asia. "However, they are cautious as the cooling measures on the China are continuing and this could affect their income. They are also affected by tightened loan conditions," he said.

A Nomura study found that China buyers accounted for 12% of total property purchases in June, up from 9% in March. Excluding corporate deals, purchases by Chinaers accounted for 18% of transactions while other foreigners' buying accounted for 10%. Only 71% of deals recorded in June were by local buyers — the lowest proportion recorded in the firm's four surveyed periods beginning in September last year.

The latest time frame coincides with the measures taken by the central government to further tighten property lending, and Nomura said the tightening policy may have pushed some speculative demand from the China to Hong Kong.

The report found Kowloon remained the most favoured location for China buyers.

The proportion of China buyers involved in property deals in Kowloon rebounded to 22% in June from 18% in March, while in the New Territories it rose to 13% in June from 2% in March. Chinaers accounted for 18% of deals on Hong Kong island in June versus 16% in March.

Henry Lam, executive director of investment services at consultancy Knight Frank, said he expected the austerity measures on the China and the appreciation of the yuan would prompt China buyers to search for luxury properties in Hong Kong. — South China Morning Post
Looking for properties to buy or rent? With >150,000 exclusive listings, including undervalued properties, from vetted Pro Agents, you can now easily find the right property on Malaysia's leading property portal EdgeProp! You can also get free past transacted data and use our proprietary Edge Reference Price tool, to make an informed purchase.