HONG KONG—High above Hong Kong, on the city’s iconic Victoria Peak, sits an elite enclave of new mansions, each outfitted with a swimming pool, grand ballroom-size living rooms and spectacular ocean views. Three homes in the Twelve Peaks development sold in the first quarter for a combined $180.6 million, or an average unit price of $14,574 a square foot—the cost for seclusion among the dense woods near the Peak, the highest point on Hong Kong Island. The price tops even one of the most expensive listings on New York’s Park Avenue. A new triplex penthouse at 520 Park Ave. is about to go on the market for $130 million, or roughly $10,490 a square foot, according to the developer’s offering plan filed with New York state. Hong Kong homes are among the priciest in the world, buoyed in part by an influx of tycoons from mainland China parking their wealth in prime real estate. Like in New York City, another epicenter of luxury properties catering to the superrich, prices have become especially inflated near the top of the spectrum. Also, like in New York, the strong demand for ultraluxury apartments has triggered a boom in development. The new luxury developments in Hong Kong that have broken ground in the last three years include Twelve Peaks, Shouson Peak and Opus Hong Kong, a Frank Gehry-designed residential project. In many large cities around the world, concern is growing that there aren’t enough billionaires to absorb all the new supply. While similar concerns exist about Hong Kong, some feel the danger of a glut isn’t as great because of the continuing influx of mainland buyers. “The rate of growth in Chinese billionaires interested in Hong Kong properties is probably higher than the rate of growth” of Hong Kong luxury properties, Nicole Wong, a property analyst at CLSA, said in an email. Hong Kong luxury-home prices rose 5.5% year-over-year to a historical high in the first quarter, according to the Knight Frank Prime Global Cities Index, which tracks the top 5% of transactions by price in major cities world-wide. Prices of upscale homes have jumped in Hong Kong despite government efforts to cool demand with a stamp duty aimed at foreign buyers, the vast majority of whom are mainland Chinese. Developers are betting the streak will continue. According to a report by real-estate brokerage Cushman & Wakefield, a mainland Chinese businessman paid $658 million in early 2015 for the historic Ho Tung Gardens. The complex was built in Chinese Renaissance style in 1927 by Robert Hutong, one of the first non-Europeans to be allowed to live on the Peak. The main villa was demolished two years ago, but the extensive gardens remain intact. The vacant site will likely be converted into luxury homes or townhouses. The eye-popping price tags of recent sales have helped fuel developer enthusiasm. In April, a 4,660-square-foot apartment at the 39 Conduit Road tower in Hong Kong’s Midlevels neighborhood fetched $56 million, making it one of the most expensive condos ever to sell in Asia, a notch below a $56.6 million sale in 2009 in the same 41-story building. The most expensive Twelve Peaks’ listing will be priced at $105.6 million, or $22,666 a square foot. The house sits high above hectic traffic at an altitude of more than 1,300 feet, with expansive views of the South China Sea. The usual luxury trappings of luxury home are there but it is the views and the prestige of living at the Peak that set it apart. On the other side of the planet, sale prices are also in the stratosphere. In New York, a duplex at the One57 tower on 57th Street sold for $91.5 million, the second-highest sale price in the city. A penthouse on the top two floors in the 90-story building had snagged the top title when it closed for $100.47 million in January. Such eye-catching sales have earned 57th Street the nickname “Billionaire’s Row.” But concerns have been stoked in New York by recent trends. Sales and prices declined in the first quarter from last year. Luxury listings comprised 30% of Manhattan inventory in the first quarter, while luxury sales made up only 10% of all Manhattan sales, according to a report by appraiser Miller Samuel and New York-based brokerage Douglas Elliman. The Hong Kong market also is vulnerable to a possible downdraft as supply increases. Analysts say demand could be eroded by an intensification of government crackdowns on the wealthy in mainland China or competition from other global cities like Tokyo, Singapore or London. But analysts are mostly sanguine about the health of Hong Kong’s ultraluxury market. David Ji, head of research in Knight Frank’s Hong Kong office, points out that there are “second and third tiers” of investors in China who are only now discovering that yields are more attractive in Hong Kong real estate than buying property on the mainland. “At least for the next five years, we should see demand (in Hong Kong) continuing,” Mr. Ji said. —Isabella Steger contributed to this article. This article was originally published on The Wall Street Journal More Hong Kong Coverage from The Wall Street Journal: - Hong Kong’s Tiny Apartments- Housing-Hungry Hong Kong Weighs Price of Green Space
Read More: - ‘Starchitecture’ Lures International Buyers to Downtown Miami- A Guide to Large Mortgages in the U.K.- How To Buy Beachfront in Mexico