Irresistable area keeps prices up
A feature of new luxury properties on the market in Mid-Levels is strong prices, with apartments selling at a considerable premium over secondhand homes.
A key reason for the aggressive pricing is the shortage of new supply in an area close to the central business district, while the luxury facilities offered by new projects are often superior to many older buildings.
"The momentum is still strong and we do not expect any imminent price correction," says Patrick Fung, sales director for Mid-Levels Central and West at Midland Realty. "There are many cash-rich investors looking for suitable assets. Mid-Levels is a place where you will find high-profile deals. We see home buyers of different nationalities. The Hong Kong dollar's peg to the US greenback makes Hong Kong properties especially attractive to overseas buyers. Wealthy mainlanders will continue to be a major buying force as they diversify their asset portfolios with more overseas exposure."
Mid-Levels comprises Mid-Levels Central above Central, Mid-Levels East (from Jardine's Lookout to Stubbs Road and Macdonnell Road) and Mid-Levels West (from Robinson Road and Conduit Road to Bonham Road and Pokfulam Road). Although there are new projects, prices are high for the small number of units available.
Cheung Kong's Kennedy Park, at 4 Kennedy Road in Central, offers 50 three-bedroom and four-bedroom flats. Units from 2,000 to 2,480 sq ft command a selling price of HK$30,000 per square foot. Cheung Kong says 17 units sold by the end of last month, generating about HK$1.3 billion. Agents say a 3,800 sqft duplex fetched HK$193 million, about HK$50,000 per square foot. A 1,888 sqft flat on an upper level at Wing Tai's Seymour reportedly sold for HK$58.53 million, or HK$31,000 per square foot last month, while a 2,348 sqft flat sold for HK$71.61 million, or HK$30,500 per square foot.
Swire's ARGENTA in Seymour Road provides 30 apartments, including 28 three-bedroom apartments, with two en suites, of 2,728 sq ft, plus a double-storey penthouse of 4,450 sqft and a simplex of 2,640 sqft, both with their own terraces. The sales were pitched at an average of HK$28,000 per square foot.
At Chun Fai Terrace in Mid-Levels East, The Signature is providing flats of more than 2,000 sqft. A 2,016 sqft apartment on a lower floor sold for HK$37.69 million, or HK$18,695 per square foot, agents say.
In Mid-Levels West, Henderson Land's High West in Clarence Terrace offers 400 to 1,200 sqft flats, for HK$14,000 to HK$16,000 per square foot.
Mid-level property owners can afford to ask for higher prices
Mid-Levels is a mix with crowded buildings in areas at the edge of Central, Sheung Wan and Western, yet it is a lovely neighbourhood halfway up the Peak. Property owners are wealthy professionals, executives or businessmen, so they are reluctant to lower prices when they wish to sell.
When there are secondhand deals, prices are impressive. In Magazine Gap Road, which is popular with the rich and famous, a 3,300 sqft apartment in Magazine Court traded for HK$88 million or HK$26,667 per sqft, according to agents. A 1,730 sqft apartment at Tavistock in Tregunter Path reportedly changed hands for HK$34.8 million, more than HK$20,000 per square foot. In May Road, a 2,722 sqft flat at Clovelly Court is said to have traded at about HK$22,000 per square foot.
Mid-Levels Central recorded 31 secondhand transactions last month, says Vivian Choi, sales manager for Mid-Levels Central at Hong Kong Property Services.
Choi says standard secondhand apartments at Tregunter Tower are selling for more than HK$14,000 per square foot, compared with HK$12,000 per square foot at the start of the year. But a 3,798 sqft duplex traded for HK$25,500 per square foot. Higher-floor units at Regency Royale in Bowen Road are changing hands for more than HK$30,000 per square foot.
"Mid-Levels is an established luxury residential area that attracts long-term investors and those looking to upgrade locally and internationally," Choi says. "Four-bedroom flats are especially in demand. Home prices in Mid-Levels have gone up in line with the overall market this year. However, activity may shrink in the short term as fewer properties are available in the secondary market."
Brian Tsang, managing director of estate agency Century 21 Alliances, says: "Many homeowners are afraid that if they sell their property, they won't be able to afford to use the proceeds to buy one of a similar quality. Whenever there are deals, they tend to be for record prices. The high price of new properties also has an effect on the secondhand market."
Dennis Wong, senior director for Mid-Levels Central and West at Ricacorp Properties, says he is not surprised to see property owners reconsidering their strategy, given the strong rally in the mass residential market. "Looking at the price movements of mass housing developments, prices in Taikoo Shing were up to HK$13,000 per square foot," Wong says. "That makes luxury flat owners in Mid-Levels ponder whether their properties may rise even further."
