Luxury home sales in Hong Kong hit record US$24.6 billion last year, says Centaline report

Lam Ka-sing
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Luxury home sales in Hong Kong hit record US$24.6 billion last year, says Centaline report

Sales of luxury homes in Hong Kong smashed all previous records last year, according to research by Centaline Property Agency.

But whether that momentum can be maintained in 2019 will depend on the outcome of the US-China trade war, analysts warned.

The number of 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. The total value of those transactions reached HK$192.67 billion, the most since records began in 1996, up 14.8 per cent from a year earlier, according to Centaline’s figures.

“The good prospects of the luxury home market attracted a considerable amount of capital,” said Wong Leung-sing, senior associate director of research at Centaline. “The good sales of new luxury housing projects led to a high number of transactions.”

Homebuyers spring into action after developers slash prices, cutting inventory as market outlook darkens

The luxury housing estate with the highest number of transactions was Fleur Pavilia in North Point, where New World Development sold 380 flats for a total of HK$9.59 billion.

The turnover of luxury residential property this year will hinge on the result of the US-China trade war negotiations, said Charles Chan, managing director of valuation and professional services at Savills.

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

Chan said transactions in the luxury homes market could rise by up to 10 per cent if a cordial resolution to the trade war is found, or drop by up to 20 per cent if it is not.

Scenic site at Kai Tak draws fewer than expected bids from property developers

Separately, lawmaker Priscilla Leung Mei-fun sold a flat measuring 389 square feet for HK$6.3 million on Monday, as Hong Kong’s home prices continued to slip. The selling price was 8 per cent lower than the HK$6.85 million paid for an identical flat in March last year.

Leung still netted a profit of HK$3.47 million, having paid HK$2.83 million for the property nine years ago.

Hong Kong’s home prices could drop by more than 15 per cent from their level in August last year, said Peter Churchouse, a veteran property investor with more than 30 years of experience.

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

For the week ended January 13, Hong Kong’s home prices had dropped 9.8 per cent since August, according to the Centa-City Leading Index compiled by Centaline.

This article Luxury home sales in Hong Kong hit record US$24.6 billion last year, says Centaline report first appeared on South China Morning Post

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