Village houses attract more buyers amid rising prices

HONG KONG: With property prices in the city rising to their highest levels since 1997, village houses may be a better option for those seeking a better of quality of life but have a limited budget.

"In the past, only local people in the New Territories would buy village houses. But more and more people from Kowloon and Hong Kong Island are looking for village houses these days," said Nelson Wong Tak-shun, general manager at Hang On Development, a developer of village houses.

Sandra Liu, a customer services executive, moved to a village house in Sha Tin with her daughters and husband five months ago from an apartment in Ma On Shan.

"This house has a better living environment. You can see the moon, you can hear the birds singing, and there is no annoying road any more. The location is also accessible," she said.

Liu is planning to buy a 700 sq ft village house in the area for about HK$2 million (RM814,389.31). "It is impossible to buy a 700 sq ft flat in high-rises for HK$2 million," she said. "A 700 sq ft flat in Sha Tin costs at least HK$3.4 million. But the efficiency rate is only 70%. I'd rather buy a village house, which is cheaper and has a high efficiency rate of 90%."

In the luxury residential market, the price differential between private housing and village houses is similarly pronounced. A 2,100 sq ft village house with a swimming pool, garden, parking space for two cars and designer interiors near Marina Cove in Sai Kung was sold for HK$25 million three months ago.

A 2,070 sq ft flat at The Cullinan, a luxury residential project above Kowloon Station, has a price tag of HK$53 million. Its efficiency rate — the percentage of the usable gross floor area — is only 77%, property agents say. A 2,191 sq ft unit at Celestial Heights in Ho Man Tin has an asking price of HK$23.8 million.

Better air quality, high efficiency rates and provisions for keeping dogs are the big attractions for village houses. The improvement in infrastructure is also helping developers to attract buyers from other districts.

"Central is only a 20-minute drive away from our new project, Hillwood, in Yuen Long," Wong said. "Downtown Yuen Long is only 3 to 5 minutes away."

The quality of village houses has also been improving in recent years.

"Earlier, developers didn't care about the design as selling village houses has never been a problem. The standard design is simple," he said, adding that the building quality of some village houses is also low grade.

In 2006, Hang On decided to improve the design and amenities of its village house project. "We believed village houses could be priced 30% to 40% higher if we increased the construction cost by 20% to improve the quality. Our village houses were sold for HK$6 million after the improvement, compared with HK$5 million in 2005," Wong said.

Hang On's latest project, Hillwood, was put up for sale in April, complete with Siemens appliances and CCTV security systems. Property management services were also offered, "which is rare in village house developments", he said.

Better quality naturally means higher prices. In the first-batch sale of Hillwood, 18 out of 25 houses have been sold at an average price of HK$8.3 million — a record price for village houses in Yuen Long. One of the buyers was a financial executive who works in Central and paid HK$9.1 million for a house.

Hillwood comprises 160 houses, making it the largest village house development. Hang On will raise prices by 10% when it relaunches the project next month. The entry price for the project is about HK$3 million, which is the indication price of a 700 sq ft flat on the third floor with a rooftop. The average price of a three-storey village house is HK$8.8 million to HK$8.9 million. With a 2,000 sq ft garden the house will be worth more than HK$10 million.

Village houses are tempting for those who want a spacious living environment at a reasonable price. But many people are cautious about buying village houses because of their lower resale value.

"The secondary market in village houses tracks the broader property market. If the transactions in private housing are active, village house sales will be active as well," Wong said.

Yuen Long, Sha Tin, Sheung Shui and Tai Po are districts with many village house developments.

But Sai Kung village houses are the most expensive, Frankie Liu Chun-hung, sales director at Century 21 in the district, said.

"It is close to urban areas but you can still enjoy a low-density living environment, which is very attractive. About 40% of buyers and tenants are foreigners."

As the supply is limited, prices of village houses have risen 20% this year, he said. — South China Morning Post
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