Big Sales in Hong Kong Buck Trend

Several recent ultraluxury sales in Hong Kong suggest the high-end market still has some kick to it. Developer Swire Properties sold its last unit at the Frank Gehry-designed Opus Hong Kong on Tuesday for 509.6 million Hong Kong dollars, or about US$65.7 million. The 5,444-square-foot 12th-floor penthouse includes two parking spaces and a 1,508-square-foot rooftop. The week before, Swire sold another unit at the Opus for HK$387.1 million, or almost $50 million. Separately this month, House No. 5 at 28 Barker Road in the Peak area sold for 542 million Hong Kong dollars, or almost $70 million. The sales come as analysts say Hong Kong is likely to see falling prices for luxury homes in the coming year. Real-estate agency Savills said in a recent report that luxury residential prices may decline by 10% next year due to dwindling investment prospects, a likely interest-rate rise, and increasing supply. Still, Savills said that a niche product in a prestigious location “will always find a buyer.” The report added that there may be "more records broken if niche products are made available to the market next year.” But some developers may face increased competition as more projects, currently in the pipeline, launch.

Luxury homes at the Whitesands development on southern Lantau island were offered by tender, a process that involves buyers privately making bids to the developer. Whitesands’ developer, Swire Properties, announced the results at the end of October. House 18, a 2,586-square-foot detached two-story modern residence, fetched HK$66.6 million, or US$8.5 million, through the tender. After the process, 23 units were put on the market with prices starting at HK$48.5 million and going to HK$76.2 million. The 28-unit development is across from Cheung Sha, Hong Kong’s longest beach. Swire said in a statement that the company is “encouraged by the market response” but that it will “only consider selling when the bids reflect the value of the development.” Swire declined to say how many bids it received. Offering homes by tender is used to gauge the market, said Denis Ma, head of research for Hong Kong at Jones Lang LaSalle. Ma said his colleagues at JLL have found that about half of tenders usually come up empty-handed. JLL was not involved in the Whitesands tender. Through the first nine months of the year, about 200 residential properties sold in the HK$50 to HK$100 million price range, representing about 12% of all property sold priced over HK$20 million, Ma said. As of Nov. 6, there were 67 sales recorded in the third quarter in this range, down from 97 in the same period a year earlier. It could be just a matter of the number of available properties at the time, Ma said, and not necessarily a sign of a worsening market. Beh Lih Yi contributed to this article.