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Everything about Landscope Christie's International Real Estate and the Hong Kong luxury property market
Market Boom
Fuelled by stock market frenzy, the property market has seen the strongest revival of activities for a long while. The secondary market is flooded with buyers, especially in the luxury sector. Sales stocks are drying up quickly, and this has prompted many sellers to raise price by leaps and bounds or to withdraw the listings altogether in anticipation of an even greater escalation.
This is a typical free market, where the market forces of supply and demand are playing in perfect concerto. The swing of sentiments can make a significant difference in price overnight. Yesterday, the government sold two plots of residential land at its auction. The plot in Aberdeen was sold for over $10,000 per square foot accommodation value (the cost of land per square foot of buildable floor space), making a record high for the district. Based on this land cost. the total development cost will be more than $13,000 per square foot and this indicates the winning developer is looking to sell the completed building at over $17,000 per square foot, which represents a double of the current market price. Such is a bullish forecast of the residential market. The location is not an upscale one, signaling the strong vote of confidence in the mass residential market ahead.
In the past four weeks, estate agents were busy with sales in all upmarket locations. Both new and old buildings have found plenty of buyers. A Korean investment fund paid close to HK$2 billion for a whole block of flats at Residence Bel-Air, triggering a surge of transactions in this new, large-scale luxury estate at Cyberport, Pokfulam. On the Peak and in the Southside, asking prices have notched up 10% to 20% gain in a matter of weeks. Buyers are undeterred by the new price tag and seem to have unlimited pool of cash. Investors are targeting any luxury properties on their radar screen, even if some of the bright spots are in Kowloon, The Harbourside and The Arch on Kowloon Station have seen brisk sales in developers’ sales office and on the street. as the strategic location is becoming more recognized by the market. It looks all set for a new wave of market boom.
By K.S. Koh