Hong Kong Property Market
Residential sales continued in Hong Kong increasing 20% month on month as of April 2017 with 7,060 units being purchased. The market saw large numbers of flats being offered with sellers providing incentives with 38% of the primary sales as reported by Knight Frank Research.
Home valuations have increased over 12 months ending in March 2017 up 18%.
Attempts by the government help slow the market and reduce prices does not seem to be a problem to buyers with the threat of criminal prosecution for evading the stamp duty tax by using first time buyers.
The Transportation and Housing Bureau is predicting the housing supply for Hong Kong will be at 96,000 flats within four years. Its expected that supply and interest rates increases will help keep prices down but other predictions indicate high land prices and housing demand could have home prices increasing another 5-10% for 2017.
The luxury home market has continued to perform well as a number of transactions being reported for leasing and sales. Rental costs at the Queen’s Garden in the Mid-Levels Central district recorded a monthly rent of HK$168,000 a 2,181 square foot unit or HK$77 per square foot. In the Island South district at the Hong Kong Parkview property tower a 1,886 square foot lease had a monthly rental rate of HK$80,000 or HK$42 per square foot.
Residential sales recorded in April included one luxury property in Island South fetching HK$79,612 per square foot. That 3,561 square foot house located at Shouson Peak was purchased for HK$283,5 million. In the Mid-Levels Central district a high floor flat the Visalia Garden building was sold for HK$52 million. The transaction for the 1,848 square foot residence averaged HK$28,139 per square foot.
Retail sales in Hong Kong have seen an increase of 3.1% year on year to March 2017 with more local retailers beginning to move into new spaces. The retail market is expected to get a boost with its potential for new development of large commercial and residential properties that can be found in East and West Kowloon and the Shatin-to-Central Link which is expected to bring high retail demand, new shopping centres and shoppers from outside the vicinity of Hong Kong.
Sales transactions for retail property include the Tai Wing Building in the Tai Kok Tsui district for a 55 sq foot Ground Floor unit at HK$16.888 million or HK$307,055 price per square foot. Also listed is the transaction for Kings Wing Plaza in the Shek Mun district for a Ground Floor unit with 1,024 priced HK$60.283 million at HK$58,870 per square foot.
Availability of space continues to be a problem in the core areas but office demand in the premium buildings has continued to be strong as the relocation of firms from the financial and legal sectors quickly took occupancy even in office space that will not be available until later in the year or in 2018.
It is also predicted that rents will increase in the Grade-A office sector for 2017 as multi-national firms, especially from Mainland China, will continue to take occupancy in the Central office market on Hong Kong island.
Kowloon had a very active April 2017 with its leasing market with 100 transactions recorded for the month mostly in Kowloon East. Rental costs are considered by the Knight Frank report as being affordable averaging below HK$25 per square foot.
Notable transactions reported in the major prime office sector include the Cheung Sha Wan district of the 14,233 square foot China Shipbuilding Tower for HK$258 million or HK$18,124 per square foot and Maxgrand Plaza with 2,910 square feet in the San Po Kong district for HK$32.5 million or HK$11,180 per square foot.