Date
21 September 2017
Mont Vert in Tai Po sold a 180 sq. ft studio (inset) for HK$1.64 million in July 2015. The price has since doubled. Photos: HKEJ, now news
Mont Vert in Tai Po sold a 180 sq. ft studio (inset) for HK$1.64 million in July 2015. The price has since doubled. Photos: HKEJ, now news

Small means very expensive in HK housing market

There is something special about Hong Kong millionaires.

Yes, there are more of them now, thanks to the surging property market, but many of them are living in smaller homes.

The irony is that small flats — studio or one-bedroom — have better returns, but even with capital gains, one might not get an upgrade to a bigger home because prices of all units are also surging.

Consider Mont Vert in Tai Po, where a 180-square-foot studio (the smallest unit ever sold) was cleared by Cheung Kong Properties two years ago.

Buyers of the units, which were designed for the elderly who want to live closer to their families, are laughing their way to the bank knowing that the unit price has doubled in two years.

A unit was just transacted at HK$3.3 million compared with the original purchase price of HK$1.64 million in July 2015.

At more than HK$18,232 per square foot, the property puts Tai Po at the level of Taikooshing where a one-bedroom flat is close to HK$10 million.

Mont Vert did not just set a new record in the housing market in the New Territories, it also led all other Hong Kong housing estates in price growth.

That is because Mont Vert was priced under HK$2 million in its debut but in the red-hot stock market, it is not easy for buyers to get a home for less than HK$4 million.

Hong Kong is in panic buying mode which we have not seen for years. Despite the deceptively uncomfortable feeling of the government toward the hot market, the price of small flats just keeps surging.

Most developers raised their initial offer price by at least 10 per cent in the past month, especially for one-bedroom units.

A prime example is Cullinan West, the Sun Hung Kai Properties residential project atop the Nam Cheong MTR station.

A one-bedroom unit of 352 square feet was offered for nearly HK$9 million, up 12 per cent from the initial launch three weeks ago.

A small unit by Cheung Kong Property offered at its North Point Harbour Glory called for more than HK$10 million.

Even a small unit in Alto Residences developed by Empire Group and Lai Sun Development in Tseung Kwan O has seen its price surge as much as 35 per cent from its initial launch in October with an average price increase to HK$23,800 per square foot.

Similar across-the-board gains were seen in New World Development’s The Pavilla Bay in Tsuen Wan and Wheelock Properties’ Napa in Tuen Mun.

We are not sure how long the party will last given government officials from Hong Kong Monetary Authority chief executive Norman Chan to Secretary for Transport and Housing Anthony Cheung have warned they would tighten taxes on buyers with multiple properties.

All told, the last thing Chief Executive Leung Chun-ying — and his successor Carrie Lam — want is an overheating property market.

– Contact us at [email protected]

BK/AC/RA

EJ Insight writer

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