Hong Kong property developers ready luxury projects amid expectations of high demand following China border reopening

·4-min read

Hong Kong property developers are looking to release more expensive homes in the city’s The Peak and New Territories districts in anticipation of the reopening of the border with mainland China.

Wheelock Properties, for instance, expects to start taking reservations for private visits to four penthouses at Mount Nicholson, Asia’s priciest address, sometime over the next few weeks.

“It is expected that, in short term, the border may be reopened partially. This may make it more convenient for interested buyers from the mainland to possibly pay visits [to properties],” said Ricky Wong, Wheelock’s managing director. “We thought it would be the right time.”

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The city’s border with mainland China is expected to reopen partially next month as part of a pilot involving daily quotas for Guangdong province only, followed by an expansion in February that will allow mass events. A full reopening allowing quarantine-free travel is expected by June at the latest.

The importance of buyers from the mainland is highlighted by the sale last week of Flat 16D and three car parking spaces at Mount Nicholson, which were marketed by Wheelock and fetched about HK$640 million (US$82.2 million) or HK$140,800 per square foot, the highest price per square foot for flats in Asia.

The sale of a flat and three car parking spaces at Mount Nicholson last week fetched the highest price per square foot for flats in Asia. Photo: Handout
The sale of a flat and three car parking spaces at Mount Nicholson last week fetched the highest price per square foot for flats in Asia. Photo: Handout

Flat 16D as well as 16C were sold to “new Hongkongers”, or mainland Chinese who had acquired permanent residency in Hong Kong, for a combined HK$1.2 billion. The buyers were likely to keep the flats for their own use, Wong said.

The four penthouses, measuring between 4,194 sq ft and 4,551 sq ft, come with rooftops and were rare, Wong said. If the price of flat 16D Flat and three car parking spaces at Mount Nicholson was taken into account, the largest penthouse measuring 4,551 sq ft may fetch about HK$641 million.

Elsewhere, CSI Properties said it would soon release its Cadenza project, which has five villas of up to almost 7,000 sq ft in Kwu Tung in the New Territories.

CSI Properties’ Cadenza project in Kwu Tung. Photo: Dickson Lee
CSI Properties’ Cadenza project in Kwu Tung. Photo: Dickson Lee

Lai Sun Development, another local developer, last month won a land parcel in Kowloon Tong earmarked for luxury housing for a higher-than-expected price of HK$1.6 billion. It was “keen to look for opportunities to increase our land bank to meet mainland buyers’ upcoming demands when the border reopens”, Dr Hoyi Lam, the developer’s senior vice-president and daughter of tycoon Peter Lam, said.

“To meet this demand, we will speed up construction and promotion activities,” Lam said. “We believe the subsequent sales will be active and generate substantial revenue for our group. By using the intake of sales revenue, we can acquire more land to increase our portfolio.”

Lam said she anticipated a 5 per cent increase in sales price of small to medium units, and a 10 per cent increase in the prices of luxury housing.

The company will also explore using social media and newspapers to communicate with buyers in mainland China, Lam said.

The reopening of the border will “definitely help with sales, especially for the residential market – we are hopeful for an increase of 10 to 20 per cent, if not more”, said Lesley Kwok, the director of Empire Group. She also said low interest rates would help.

The Northern Metropolis plan, together with a low-interest environment, for instance, will undoubtedly help to attract more potential mainland Chinese and overseas buyers to the market, Kwok said. “We will be launching sales for our two Kai Tak runway residential projects in 2022, so it is fortuitous that the timing works out for us.”

But the extent of any boost to the market could be limited by Hong Kong’s 30 per cent stamp duty for non-local buyers and mainland China’s capital controls, said Andy Lee Yiu-chi, the CEO of Centaline China. The luxury market could benefit most, as those willing to pay the extra 30 per cent were mostly luxury homebuyers, Lee added.

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