(31 May 2017, Hong Kong) Savills has released the latest briefing on the Residential Sales.
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Overview
Market sentiment generally remains subdued after the latest round of restrictive measures (including the HKMA’s restriction on bank lending to developers providing high LTV mortgages), and this is being reflected in declining luxury transaction volumes.
On Hong Kong Island, townhouses are still highly sought after with SEA Holdings’ purchase of 11 houses at 1-9 Shouson Hill Road East for HK$1.528 billion, the most eye-catching. The HK$51,000 average price represented a significant discount to nearby new house developments selling for HK$80,000 to HK$100,000 per sq ft, suggesting a potential capital gain in the medium to long term.
Industrialists have been keen to find homes in Kowloon and the New Territories for their own / second generations’ use with Sai Kung / Clear Water Bay among their top picks.
Looking ahead…
“New luxury launches will continue to drive the market (rather than second hand sales) with landlords likely to harden their negotiation stance further if good sales records can be achieved in the next round of launches. The impact of the latest restrictive measures may ease over time especially in the luxury segment,” said Simon Smith, Head of Research and Consultancy, Savills.
Affluent Mainlanders (most with HKID) and local families are still looking for trophy assets / niche products but finding them more and more difficult to identify. With extremely low holding costs the super luxury segment will continue to be a sellers’ market with the next super luxury transaction likely to come with yet another record breaking price tag. Luxury prices therefore look set to continue to increase over the rest of the year, in the order of 5%-10% as a result.
For more information, please visit: http://www.savills.com.hk