Hong Kong Luxury Real Estate Sales Repeatedly Set Records

December 20, 2011 12:07 pm Last Updated: December 24, 2011 12:16 pm

Recently, People’s Bank of China confirmed that the real estate market in Mainland China has been taking a turn and continuously declining. Hong Kong developers took this opportunity to promote real estate in Mainland China, including Guangzhou and Shenzhen. Some mainlanders are willing to spend hundreds of millions of yuan on Hong Kong properties.

According to data from the China Index Academy, out of 35 cities that were studied, real estate sales decreased in 30 cites, with sales declining by over 50 per cent in seven cities, when compared with the same period last year.

On Dec. 2, the People’s Bank of China website announced that the real estate market in Mainland China is changing, with reductions in both investments and loans by developers, the real estate prices are taking a turn.

Hong Kong developers pushing north

The sluggish sales and prices for real estate on the mainland provided Hong Kong developers with an opportunity. Hong Kong Developer SINO LAND took the opportunity and started to promote Hong Kong properties in Guangdong and Shenzhen.

In recent years, lots of mainlanders have rushed over to Hong Kong to purchase Christmas presents. This year, many Hong Kong developers are also making an end of the year dash, taking this opportunity to advertise Hong Kong real estate properties.

According to a Southern Metropolitan report, SINO LAND Sales General Manager Tian Zhaoyuan said: “Facing the restricted purchasing policy of the mainland real estate market, many Chinese are buying real estate abroad. Hong Kong is a very good location. First of all, there is no language barrier or culture barrier; secondly, Hong Kong is a very global city. In Hong Kong, there are famous schools where children can enjoy completely equal education opportunities.”

Sales of detached house reached new record

Sino LAND’s newest luxury apartment series called Providence Bay, in East Rail near Hung Hom University Station, attracted 30,000 visiting buyers, many are from Guangdong Province. The most expensive property Unit No. 2 was sold to a Shenzhen buyer for the record price of US$20.43 million (HK$158.88 million).

“The percentage of Hong Kong real estate buyers from the mainland is increasing. Last year, for The Hermitage project located in West Kowloon, mainland buyers accounted for 35 per cent. Our company really values mainland customers, especially those from Shenzhen, Guangzhou and other Pearl River Delta regions,” said Tian Zhaoyuan.

Other than the record price mentioned earlier, a property at the Imperial Cullinan development located in Tai Kok Tsui was recently bought by mainland investors from Wuhan, Hubei Province under the name of Zall Development for US$19.4 million (HK$150.69 million). This is the first time they bought property in Hong Kong. This property is the largest of the four at the development with an area of 3,532 square feet, including a roof top swimming pool, and it is the largest mansion in the neighborhood. The kitchen and breakfast areas are the first in Hong Kong to use Armani/Dada furniture design by Giorgio Armani. The kitchen furniture alone cost US$450,000 (HK$3.5 million).

Rooftop pool property sold for record price

Mansions with rooftop pools seem to be a favorite. In November, at a development in Tseung Kwan O, “The Wings”, a 2,560 square foot property connected to a rooftop pool was sold to a mainland buyer for a record price of ~US$2,600 per square foot (HK$20,000 per square foot).

According to real estate registration records, Oriental Success International Limited bought the property for US$6.6 million (HK$51.2 million). The CEO of the company is Huang Shaopeng, and stock holders are Cai Wanxin and Cai Wanpeng. According to company records, Huang lives in Guangdong’s Huilai County and the other stockholders live in the Provident Centre of northern Hong Kong.

Sun Hung Kai Properties General Manager Chen Hanlin said that for building 6, floor 45, Unit A: “The property sold for a final price of ~US$6.9 million, an average of ~US$2,600 per square foot, exceeding the previous record of US$2571 per square foot.”

Chen Hanlin said that two other properties at this development with roof top pools are marked for ~US$2,830 per square foot; a number of buyers are interested. If they are sold, they might produce new record prices.

Local agents said the other two properties are building 1, floor 45, Unit A and building 8, fl oor 45, Unit A, both are around 2,455 square feet. Since the development was built on top of the subway station, and includes a hotel and a Grade A office building, many buyers expressed interests.

The developers recently announced two bedroom apartments at the development, 206 units were sold for between $770-$900 per square foot. This is the first time that the per square foot value went below $900 per square foot. Including the discounts, the lowest price was only $800 per square foot.

The district agent said that right now for two bedroom apartments in Tseung Kwan O, even the second-hand price is between $770-$900 per square foot. Since the new development is nearing prices for second-hand properties, it’s likely to attract many second-hand buyers in the coming months.

Sino LAND is also pushing for new developments in Mainland China. Sino has partnered with two other real estate companies C. C. Land and Chinese Estates Group and bought land in Chongqing worth ~US$540 million. Construction started in July of last year; the project is expected to be completed in June of 2013.

Read the original Chinese article.

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