(28 September 2018, Hong Kong) – The completion of luxury units on the Peak will drop significantly to an average of 13 units per year between 2018 and 2020, compared to 36 units per year in the previous three years, according to JLL’s Residential Sales Market Monitor released today. New supply on the Peak will only contribute 2% to the total luxury supply in Hong Kong over that period. This fall in new supply is expected to continue to support house prices in the district and will likely outperform other luxury residential precincts.
Figures from JLL show capital values of residential on the Peak increased by 7.1% quarter-on-quarter in 3Q18, slightly faster than the 5.8% growth recorded in the previous quarter. In comparison, the growth in capital values in the overall luxury market has slowed from 4.6% quarter-to-quarter in 2Q18 to 3.9% in 3Q18.
Henry Mok, Regional Director of Capital Markets at JLL, said: “Recent pessimism on the market outlook and the interest rate hike have had a minimal effect on the residential and land prices on the Peak. As new residential supply on the Peak will decrease significantly in the next few years, we believe developers will be aggressive in bidding for the government’s Mansfield Road residential site. The site will be one of the major sources of new housing supply on the Peak. It is expected to set a new land price record for luxury residential in Hong Kong.”
Cathie Chung, National Director of Research at JLL, said: “We believe there is still potential for growth of residential prices in the area. With availability remaining extremely tight, it would be no surprise to see more record-breaking transactions in the coming months, even as momentum in the broader residential market slows.”