Hong Kong amongst most expensive cities for luxury homes
Despite the down-cycle in mass residential market, the luxury market in Hong Kong remained resilient in 2022.
3 minutes to read
According to The Wealth Report 2023, Hong Kong prime prices dropped 1.6% year on year in 2022, ranked 89 out of 100 locations.
However, Hong Kong remains the second most expensive in the world for the 11th consecutive year, outranked only by Monaco.
A review of how many square metres of prime property US$1 million can buy you worldwide found that buyers enjoy 22 sqm in Hong Kong and 17 sqm in Monaco. This means buyers are getting 36% and 38% less space than in the third and fourth place cities of New York (33 sqm) and Singapore (34 sqm).
Given the downward rigidity in luxury home prices, it is not expected Hong Kong’s current position would be taken over by any of the cities from behind.
Supporting market sentiment was the full reopening of borders with the Chinese mainland and beyond in February 2023, which saw the return of professionals and expatriates.
Luxury residential market
Neither local nor overseas buyers were dissuaded by the price tags of luxury Hong Kong homes. In 2022, Hong Kong was ranked fourth globally in terms of the number of sales in super-prime residential assets (US$10 million or above).
There were 125 transactions recorded, behind London, New York and Los Angeles. The luxury residential market has regained momentum with some eye-catching luxury deals.
A handful of notable transactions demonstrated continued buyer appetite for prime assets:
- A 654 sqm house at Mount Nicholson at The Peak was sold for HK$577.4 million or HK$882,581 per sqm
- A 606 sqm house at 20 Kent Road, Kowloon Tong was sold for HK$480 million or HK$792,442 per sqm
- A 373 sqm house at Central Peak II, Mid-Levels East was sold for HK$409.6 million or HK$1,097,842 per sqm
- A 352 sqm mid-floor unit at Block 2, Regence Royale, Mid-Levels Central was sold for HK$203 million or HK$576,846 per sqm
Due to limited existing and future supply, buyers are still seeing Hong Kong’s luxury homes as trophy assets.
Current owners, on the other hand, usually have strong holding power and are not under pressure to dispose their assets. This supported the luxury home prices when the market was in trough and further uplifted the prices when the market was towards the peak.
According to The Wealth Report Attitudes Survey, for the ultra-high-net-worth individuals (UHNWIs) who had a net worth of US$30 million or above in Hong Kong, residential assets would be the real estate sector that they would most consider investing in 2023.
The Attitudes Survey collates responses from more than 500 private bankers, wealth advisors, intermediaries and family offices who between them manage over US$2.5 trillion of wealth for UHNWI clients.
Martin Wong, Head of Research and Consultancy in Knight Frank Greater China, says, “Looking ahead, we would see substantial growth in investment volume as UHNWIs become more experienced in diversifying their portfolio, especially in the post-Covid era when everyone is trying to compete for first-mover advantages. Private buyers in Hong Kong are taking advantage of the ongoing repricing of assets and stronger currency positions. Residential premises remain the most preferable property investments for UHNWIs in the Greater China region.”
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