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Continued resilient demand driving the luxury residential market

HONG KONG SAR, 19 August 2021 – Leading diversified professional services and investment management company Colliers (NASDAQ and TSX: CIGI) has today released a White Paper titled ‘Luxury residential Market H2 2021’, which sheds light on the performance of the Peak and the Southern sub-markets of luxury residential sector, and explores these sub-markets’ outlook for the remainder of 2021.

After a considerable momentum slump in Hong Kong’s luxury residential sector (more than HK$100 million worth) from H2 2019 to H1 2020, activity has started to pick up again since H2 of 2020, especially in the Peak and Southern sub-markets. On the sales side, the number of transactions for H2 of 2020 reached 20, up 54% YOY. The surge carried forward into 2021, creating a strong H1 where there were 30 transactions, a 500% increase YOY. The total price consideration between July 2020 and June 2021 came in at HK$12.8 billion, a 115% increase over the same period one year before, to HK$5.9 billion. 

“We have seen more transactions in H2 2020- H1 2021 despite the pandemic, as the purchasing price has become more attractive given the luxury residential property price has now come to HK$80,000 to HK$100,000 per sq. ft. range,” said Hannah Jeong, Head of Valuation & Advisory Services in Hong Kong. 

“Amid growing optimism of Hong Kong’s economic recovery and the pandemic being brought under control, the demand will remain healthy. We forecast a gradual price growth of 3% for H2 of 2021,” added Jeong.

Luxury properties soliciting equal interest from mainland Chinese and wealthy locals    

Both mainland Chinese and wealthy locals contributed equally for the amount towards the rapid transaction volume of the luxury residential market from 2020 to H1 2021, with mainland Chinese executives and high-profile professionals continued to make headlines. In March this year, Wharf sold five houses at 77/79 Peak Road on the Peak, with two being bought by mainland buyers and the rest were purchased by wealthy local residents. Moreover, among the 17 houses sold at Mount Nicholson in the Peak since sales launched in 2016 to H1 2021, 10 of them were bought by mainland Chinese buyers.

“Market evidence points towards the fact luxurious apartments have become a more attractive asset type compared to houses, as apartments offer more flexibility and require a lower lump-sum consideration, comparatively offering more opportunities. Mount Nicholson is a prime example, the mixed product offering of both houses and apartments has seen the latter achieve higher unit rates and expedited take-up,” said Jason Fung, Director of Valuation & Advisory Services in Hong Kong.

Hong Kong as IPO hub driving luxury residential market

Hong Kong’s IPO market has been buoyed with positive market sentiment. Since the beginning of 2020 to H1 2021, according to HKEx, there were 180 IPOs listed, accounting for a total of more than HKD600 billion. With companies listing in Hong Kong, this brings new waves of c-suite entrants and high-net-worth individuals into the Hong Kong market, who are prime candidates for purchasing luxury residential properties.

“Hong Kong’s luxury property sector sees great investment potential, benefiting from rising number of IPOs listed on the Shenzhen Stock Exchange as well. Among the listings since 2020, 25.6% were from companies based in Guangdong Province. Because of the proximity to Hong Kong, the c-suites of those listed companies would be likely to look for property investment opportunities in Hong Kong,” said Rachel Chin, Associate Director of Valuation & Advisory Services in Hong Kong.

To find out more about the trend of Hong Kong’s luxury residential market and what it could mean to buyers, investors and developers, click here to download the full White Paper.


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Hannah Jeong

Head of Valuation & Advisory Services

Valuation & Advisory Services

Hong Kong

Hannah Jeong has extensive valuation & advisory services experience over 15 years including property investment and development projects specialising in valuation, development consultancy, financial analysis and feasibility studies. Project’s geographic coverage span across Asia Pacific and Middle East, in particular Hong Kong, China and Korea. She has started her career with Colliers since 2006 and is now heading our Valuation and Advisory Services - Hong Kong Office with over 40 professionals.

Hannah has strong client coverage on major financial institutions including global real estate funds and private equity firms.

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Jason Fung

Director

Valuation & Advisory Services

Hong Kong

Jason joined the Valuation and Advisory division of Colliers International in  2016 and is now acting as a Senior Associate Director of the division.  He has gained over 12 years of experience in the real estate field and specialises in valuation of a diverse range of properties in HK and China.

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Rachel Chin

Associate Director

Valuation & Advisory Services

Hong Kong

Rachel is an Associate Director of Colliers’ Valuation and Advisory Services in Hong Kong. She specialises in valuation and consultancy services across the property sector, in particular portfolio valuations for corporate clients and feasibility studies in China.

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