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Saturday, Oct 24, 2020

US$31 million deal shows allure of Hong Kong’s luxury real estate intact

US$31 million deal shows allure of Hong Kong’s luxury real estate intact

Hong Kong luxury home prices remain resilient this year despite sharpest economic downturn ever, but transaction volumes plunge.

A Hong Kong buyer snapped up a luxury home in Kowloon for more than HK$71,000 (US$9,160) per square foot, the second-most expensive deal in the past three months, in yet another indication of the allure of the city’s high-end property.

The buyer, “a very rich family” paid over HK$238 million for the 3,330-square-foot penthouse with a 2,933-square-foot balcony at the St George’s Mansions project in Kadoorie Hill, according to Victor Tin, group associate director of sales at Sino Land, a joint developer of the estate.

The project, consisting of three 20-storey buildings, is surrounded by luxury villas and thick greenery. The neighbourhood is also home to Hong Kong actor Andy Lau Tak-wah and Canto-pop singer Kelly Chen Wai-lam, and is known for its association with the Kadoorie family, one of the most powerful families in Hong Kong, which developed the area in the 1930s.

“We are delighted that the project is well received by families, in particular those who have lived in the legendary neighbourhood for generations, and who hold positive outlook for the market,” said Tin, who declined to provide further details of the buyer.

Kadoorie Hill has links to the powerful Kadoorie family, which invested in land in the area in the 1930s.

At HK$71,471 per sq ft, it ranks among the major high-end property transactions since June, according to data from property services provider Savills. Only a luxury home at 20 Perkins Road in Jardine’s Lookout, which sold for HK$82,875 per sq ft in August, surpassed this deal.

The four-bedroom unit is one of the 36 at the estate put onto the market by the developer through tender in late July. Earlier in August, a 2,140-square-foot flat sold for HK$115 million, or HK$53,738 per sq ft. In the same month, a buyer bought a 1,870-square-foot flat for HK$86 million.

Hong Kong’s luxury home prices have remained resilient this year despite the coronavirus infections and the worst economic downturn on record. However, transaction volumes plunged, as more buyers adopted a “wait-and-see” approach.

In the third quarter, luxury home prices only fell by 0.1 per cent and 0.5 per cent in Hong Kong Island and Kowloon, respectively, according to Savills data.

The city recorded 60 transactions of super luxury homes – those valued at over US$10 million each – in the first half of this year, down 61 per cent from 155 in the same period in 2019, according to property consultancy Knight Frank. The combined sales value plunged to US$812 million from US$2.34 billion over the period.

“Homeowners in luxury residential market have strong holding power and have not cut the asking prices significantly,” said Henry Mok, senior director of capital markets at real estate service provider JLL in Hong Kong, in a report in August.

Meanwhile, “potential buyers have adopted a ‘wait-and-see’ approach in the hopes of benefiting from bigger discounts when the market is in downturn,” he added.


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