NT luxury race heats up

Overseas Property | Kevin Xu 23 May 2019

The premium property market in the New Territories is experiencing an "Indian summer' due to the recent improvement in the square-foot prices of luxury homes in the area.

For example, the Valais project in Sheung Shui - dubbed a "ghost town" by local media - saw four transactions in the secondary market last month - the highest within the past year.

Midland Realty Senior Area Sales Manager Lok Wu said the demand for Valais units rose as the per square foot price difference between luxury homes and ordinary residential flats narrowed.

Prices of Valais units currently range from HK$15,000 to HK$16,000 per sq ft, while flats at Grand Yoho in Yuen Long cost more than HK$20,000 per sq ft in the primary market. Meanwhile, second-hand homes at Yoho Midtown in Yuen Long are running at about HK$17,000 per sq ft.

About 80 percent of Valais purchasers bought for investment purposes. Many customers from other districts in Hong Kong, including Sha Tin and Tai Po, checked out Valais units last year amid a surge in home prices as there were many loss-making resales of Valais flats, Wu said.

He added that a 1,500-sq-ft luxury apartment at Valais was sold for only 3 to 5 percent higher than the original purchase price, and loss-making resales have fallen as owners are disposing their units one after the other.

Wu also said more clients bought luxury homes that have parking spots to reduce parking costs, as rents for parking spaces were rising.

"Many CEO-level buyers have more than one car, and the monthly rent for each parking space costs about HK$3,000, so it saves more to live in luxury houses with parking spaces," Wu said.

A senior executive of a foreign company, who initially rented ordinary residential premises, decided to purchase a luxury house in the New Territories to save on parking costs after his lease for his flat expired, according to Skarloey Property.

Wong Yung-shing, chief executive and group managing director of Dynasty Premium Asset Valuation & Real Estate Consultancy, said the market now focuses on the new "ultra-luxury" projects on Kau To Shan in Sha Tin, and at Siu Lam in Tuen Mun in the primary market for their superior ancillary facilities.

Meanwhile, Many Wells Property president Lawrance Wong Dun-king said developers can attract mainland clients and business people by labeling luxury properties in the New Territories as "ultra-prime" rather than mid-to-high end, and the prime property prices in the area could increase within the next year.

However, Wong pointed out that luxury houses in the New Territories are not ideal investment instruments, as the prime home prices in the area grow slower than in urban areas.

Sammy Po Siu-ming, chief executive of Midland Realty's residential division, estimated that second-hand premium property prices in the New Territories will only climb about 10 percent this year, compared to the overall 15 percent to 20 percent rise in luxury home prices in Hong Kong, as prime property supply in the New Territories soared over the past seven years.

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