Bubble-looking For HK Luxury Condos

No matter how you cut, slice or dice the price HK$63,000 psf is a doozy. Yes, that is about $8,076 psf or RM27,400 psf. Much of the buying over the past few months have been by Chinese from the mainland. Article from The Standard.

Wednesday, October 14, 2009

Prices for luxury properties in Hong Kong are now firmly at a sky-high level, a fact confirmed yesterday as a developer slapped a price of more than HK$63,000 per square foot on a premium apartment in Mid-Levels.

That will make it the highest-priced penthouse in Asia - and it is not even on top of the building.

The top-of-the-pile tab was revealed as Henderson Land Development (0012) released the first price list for its residential project 39 Conduit Road yesterday. On it was the HK$357.7 million, 5,636-sq-ft duplex. That means a square- foot record of HK$63,473.

Another duplex, 5,131 sq ft and also on the 66th floor of the 88-story building, is listed at HK$311.4 million, or HK$60,696 psf.

In June last year, Sun Hung Kai Properties (0016) sold a 5,497-sq-ft penthouse at The Arch, atop Kowloon MTR Station for HK$41,100 psf - a record for Asia.

The pattern of soaring prices is setting off alarms as well as expressions of amazement.

Lui Hon-kwong, associate professor of marketing and international business at Lingnan University, warned of the danger of a price bubble in the property market, which is drawing huge inflows of cash from super-rich mainlanders.

"A price bubble is determined by the mainland government's policy direction," he said. "If it does not support people in investments, our property market will lose ground and prices will plunge."

Still, Eddie Hui Chi-man of Polytechnic University's department of building and real estate notes that the sale of expensive homes by Henderson is at the upper extremes of the property market and should not have a bearing on the mass market.

"Some super-rich people are chasing luxury homes like others collect paintings and wine because they are rare," Hui said.

"The property market is recovering ahead of the real economy, however, and people can afford mortgage payments."

Besides the two premium duplex homes, Henderson also set prices for 18 "regular" homes in the block - sized at 2,808 and 3,284 sq ft - from HK$73.4 million to HK$137.9 million. The developer's sales general manager, Thomas Lam Tat-man, said the company will set about securing sales as early as this afternoon.

Customers have shown interest in 20 to 30 apartments, Lam said. They are negotiating up to HK$70,000 psf for the most expensive unit.

The project has a total of 66 homes sized from 2,800 to about 7,600 sq ft, with two penthouses on the 88th floor still to be priced. Henderson has suggested it could be seeking a staggering HK$100,000 psf for the loftiest pair.

The firm intends to sell 40 percent of the homes this year, which would bring in about HK$4 billion. Lam predicts a 10 percent increase in prices for homes sold later.

Midland Realty regional sales director Jimmy Lee said the prices asked by Henderson will not deter buyers. "Housing supply in Mid-Levels is very limited and investors have long been waiting for new units."

p/s photo: Han Ye Seul