Valuations rise as market picks up

Rebounds in transaction volume and selling prices in the second-hand market have pushed up bank valuations. Increases of between 0.7 and 4 percent were recorded in 12 out of the 20 index housing estates in the latest valuations last month. The other eight remained stable with no...

Staff reporter

Thursday, June 03, 2021

Rebounds in transaction volume and selling prices in the second-hand market have pushed up bank valuations.

Increases of between 0.7 and 4 percent were recorded in 12 out of the 20 index housing estates in the latest valuations last month.

The other eight remained stable with no decline, showing that banks have become more aggressive in their valuations due to the rally in the secondary market.

Kingswood Villas in Tin Shui Wai had the most notable performance among the index estates, though Ming Tse, director of Many Wells Property, pointed out its prices were still relatively low.

With residents moving in at Wetland Seasons Park in the same district and the upcoming launch of the Tin Wing light rail station project nearby, Tse believes their developer Sun Hung Kai Properties would build more facilities in the neighborhood. He expects the developer to recreate a smaller version of its Kwun Tong commercial and retail complex apm, which will increase the potential for prices and valuations in the area to rise in the future.

Meanwhile, Ricacorp Properties chief executive Willy Liu Wai-keung noted that overall property prices have risen by about 5 percent so far this year.

Blue-chip housing estates took the lead. Kornhill and Taikoo Shing in Quarry Bay, Mei Foo Sun Chuen in Lai Chi Kok and Kingswood Villas all saw record-high prices that outperformed.

One of the transactions of note was a Kingswood Villas duplex with a rooftop that went for a record high of HK$14.3 million, which helped raise the housing estate's average price per square feet. Liu said the unprecedented deal showed that large housing estates often benefit from buyers chasing the market, as they lead to a rise in bank valuations.

Alex Leung Pui-wang, senior director at CHFT Advisory and Appraisal, noted that the median monthly increase in valuations across various districts was about 2.5 percent last month.

Kingswood Villas recorded the most transactions among second-hand housing estates in the New Territories and saw frequent record-breaking transactions in the past three weeks, which Leung believed offered a reasonable explanation for why banks are increasing their valuations.

Kornhill and Taikoo Shing were among the three housing estates on Hong Kong Island with the most transactions.

Their 3 percent increase in valuations was in line with the average increase in the city, and Leung added that if recent primary sales were ideal, it would also drive up the prices of secondary market housing estates.

A 458-sq-ft unit in Kingswood Villas saw its valuation rise nearly 4 percent from HK$4.51 million in April to HK$4.69 million last month.

Taikoo Shing also performed well, with a 1,021-sq-ft unit in Marigold Mansion estimated at HK$23.87 million in April recently valued at HK$24.68 million, up nearly 3.4 percent.

A 596-sq-ft unit in Kornhill that was valued at HK$10.69 million in April also saw its valuation rise nearly 3 percent to HK$11.01 million last month.

And a 1,000-sq-ft unit in Mei Foo Sun Chuen, Lai Chi Kok, which was estimated at HK$15.54 million in April, was valued at HK$15.9 million in May, increasing by more than 2.3 percent.

Nan Fung Plaza in Tseung Kwan O, which saw a more than 3.1 percent decline in April, picked up last month when a 462-sq-ft unit's valuation rose nearly 1.9 percent month on month from HK$7.44 million to HK$7.58 million.

As for Metro Harbour View in Tai Kok Tsui, which rose by up to 3.5 percent in April, a 353-sq-ft unit that was valued at HK$6.2 million two months ago rose by a further 1.6 percent to HK$6.3 million last month.