Northern Metropolis scheme will boost house prices in Yuen Long, Tuen Mun by up to 10 per cent this year, analysts say

·4-min read

Plans to create a booming economic and residential hub for some 2.5 million residents near Hong Kong’s border with mainland China may boost home prices in Tuen Mun, Tin Shui Wai and Yuen Long by as much as 10 per cent in 2022 and by up to half in the coming five years, say analysts.

House prices in these three northwestern areas will benefit the most from the government’s Northern Metropolis scheme, thanks to the growth potential and infrastructure it provides, said Perry Fong, senior principal sales director at Centaline Property Agency.

“In five years, there will be an increase of about 40 to 50 per cent,” said Fong. “The main reason is that the government’s new innovation and technology industry policy has been implemented, which has helped the transformation of the region. People feel that there is new hope and are willing to move in.”

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The community facilities and transport links in these areas have already matured and are popular among buyers, Fong added.

The Northern Metropolis plan involves the development of an IT hub in the northern New Territories, construction of up to 186,000 homes and a new cross-border railway linking Hong Kong to the Qianhai economic zone in Shenzhen.

Centaline’s price index for large estates in the New Territories West increased by 5.7 per cent in 2021 and is up 30.5 per cent from five years ago. Average house prices across Hong Kong have risen 27.5 per cent since early 2017.

Fong said the private housing estates that will see the biggest gains will be Yoho in Yuen Long and the Wetland projects in Tin Shui Wai developed by Sun Hung Kai Properties. The Century Gateway development in Tuen Mun will also benefit.

“These will be the biggest risers. The chance of rising by half is very high, because they are all new properties that were occupied in recent years. They are of high quality, popular, and have railway facilities,” he said.

Century Gateway saw a 14.7 per cent surge in the price per sq ft in 2021 to HK$18,491 (US$2,371), while Kingswood Villas in Tin Shui Wai rose 4.4 per cent to HK$11,126, according to Centaline. In contrast, on Hong Kong Island, the price per square foot in Taikoo Shing dipped 0.1 per cent to HK$19,917.

The first deal in Tin Shui Wai’s secondary market this year saw a buyer fork out HK$5.38 million for a Home Ownership Scheme flat at Tin Shing Court measuring 650 square feet. The buyer was motivated by a belief that the Northern Metropolis will boost home prices, as well as the good connectivity and amenities in the area, said Austin So, a senior manager at Midland Realty.

In the coming year, Yuen Long will be the biggest beneficiary, with an estimated 10 per cent increase in home prices, compared to 5 per cent for Hong Kong overall, said Andy Chu, a senior manager at Ricacorp Properties.

“Yuen Long is considered to be the most mature area in the northern metropolitan area,” he said. “It is close to the domestic border. If the border can be reopened this year, and mainland funds pour into the property market, Yuen Long district will be the first choice [for buyers].”

The Northern Metropolis initiative was unveiled last year in the latest policy address by Chief Executive Carrie Lam Cheng Yuet-ngor. Housing demand in the New Territories as a whole is expected to grow in the years to come as the new hub provides an estimated 650,000 employment opportunities and accommodates 2.5 million people, almost three times the current population of the area.

“In the short term, with land and housing supply unlikely to rise noticeably and investors potentially starting to front-run the market, property prices in the Northern Metropolis will have higher upside potential than the rest of Hong Kong,” said Nelson Wong, head of research at JLL in Greater China.

The city’s lived-in home prices fell to a seven-month low in November after peaking in August, according to data from the Rating and Valuation Department, as buyers were put off by the stock market slump and a looming interest rate increase in the United States.

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