Northern Metropolis: optimism fuels home prices while developers race to capture market upswing in Hong Kong’s northwestern region

·3-min read

Hong Kong’s vision for the Northern Metropolis development and the hot reception to CK Asset Holdings’ latest development in Hung Shui Kiu have fuelled optimism on home prices in the city’s northwestern region, analysts said.

Hung Shui Kiu, located 37km or a 40-minute drive from the central business district, will be upgraded to a core business district as part of the city’s plan to push growth away from the crowded city centre. Infrastructure projects will include a railway linking the district with Qianhai in Shenzhen, the richest city in southern Guangdong province.

“The government planned to soon develop the area and will invest in new infrastructure, and this will certainly improve the living environment in the area,” said Shih Wing-ching, founder of Centaline Property Agency. “Those areas will definitely see prices rising faster than some developed regions.”

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That optimism has helped fan sales of new flats in the area in recent weeks while developers are seen racing to the market to catch the upswing. Buyers snapped up all 200 units at #Lyos on Saturday, a project developed by Li Ka-shing’s CK Asset. It is first large-scale new project in northern Hong Kong to come to the market since the city unveiled its Northern Metropolis blueprint during the annual policy address last month.

About 10,000 buyers vied for 200 flats for sale at CK Asset’s #Lyos project on November 6. Photo: Xiaomei Chen
About 10,000 buyers vied for 200 flats for sale at CK Asset’s #Lyos project on November 6. Photo: Xiaomei Chen

Prices in Hung Shui Kiu are expected to outperform the overall gain in Hong Kong’s housing market by 5 per cent on “infrastructural advantages”, said Louis Chan, Asia-Pacific vice-chairman and chief executive of the residential division at Centaline.

CK Asset collected more than HK$1.2 billion (US$154 million) from #Lyos last weekend, which included the sale of 13 duplex units by tender, the developer said. Some 10,000 people showed up to compete for the 200 flats, Chan estimated. The developer has offered another batch of 90 flats for sale on November 10 at higher prices to meet demand.

The Northern Metropolis concept boosted investors’ interest in #Lyos, said Dave Ma, Hong Kong Property Services (Agency)’s chief operations officer. Some buyers were looking to buy their first homes, or upgrade to bigger units, while others were buying for investment, he added.

Most buyers from other areas “normally would not choose such a relatively distant location”, Ma said. “They think there is potential for development and investment.”

“Some buyers originally wanted to buy a second home in the Greater Bay Area but the border has not reopened yet,” he said. So they decided to buy in Hung Shui Kiu instead given the anticipation of the Northern Metropolis, Ma added.

That is expected to heighten the competition among developers. The potential supply of new flats in Yuen Long, including Hung Shui Kiu, and Tin Shui Wai districts, would be about 1,759 units in the fourth quarter, the highest across Hong Kong, according to Midland Realty.

Aerial view of San Tin area at the northern part of New Territories in Hong Kong. Photo: Winson Wong
Aerial view of San Tin area at the northern part of New Territories in Hong Kong. Photo: Winson Wong

The total number of residential transactions in the entire Yuen Long district, including Hung Shui Kiu, rose to 2,287 units last quarter, according to Ricacorp Properties. The value more than doubled to HK$16.28 billion from a year earlier.

People are optimistic about home prices there, given the development potential and with limited supply, said Willy Liu, CEO of Ricacorp Properties. Hung Shui Kiu’s outlook is “definitely good” as the government will aggressively develop the Northern Metropolis, he added.

The Northern Metropolis plan will prompt “major developers to get ready”, he said. “In the past, the buying desire for Hung Shui Kiu properties was not very strong. Now, confidence in the Northern Metropolis is huge.”

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