Sales of luxury homes in Hong Kong at a record high
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Sales of luxury homes in Hong Kong at a record high

THE amount of luxury home sales in Hong Kong, the world’s most expensive real estate market, peaked at a record high last year, a prominent property agency said.

The Centaline Property Agency homes that sold for HK$20 million (US$2.55 million) or more climbed above 4,000 for the first time, up 8.2 per cent on the year, to 4,189, according to the South China Morning Post.

Centaline’s figures showed the total value of the transactions reached HK$192.67 billion (US$24 billion), the highest since records began in 1996.

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The transactions were also nearly up 15 percent from 2017.

“The good prospects of the luxury home market attracted a considerable amount of capital,” Wong Leung-sing, senior associate director of research at Centaline, was quoted as saying

“The good sales of new luxury housing projects led to a high number of transactions.”

Centaline said Fleur Pavilia in North Point was the luxury housing estate witht he highest number of transactions, with 380 flats sold at a total of HK$9.59 billion (US$1.22 billion).

However, analysts said the momentum this year can be maintained but this depended on the outcome the US-China trade war.

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Apartment blocks in Hong Kong. Source: Max Privette / Unsplash

Charles Chan, managing director of valuation and professional services at Savills, said the turnover of luxury properties will hinge on the result of negotiations from the trade war.

“If the trade war ends well, more mainland capital can flow into Hong Kong, driving its economy and stimulating the stock and property markets,” Chan said.

“If it cannot be ended, the mainland economy will be [badly] affected. The mainland will not relax its grip on capital, badly affecting Hong Kong’s capital inflow.”

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He added if a cordial resolution to the trade war is found, prices of luxury homes can rise by up to 10 percent, but prolonged hostilities could see a drop of 20 percent.

Peter Churchouse, a veteran property investor, predicted Hong Kong home prices dropping by more than 15 per cent from their level in August last year.

“Prices reflect investor demand, which can be cut short by all sorts of things, like politics, capital flows and interest rates,” he said.