Would Redhill Peninsula be in red?

Ben Kwok September 28, 2023 22:12

How much discount would one need to apply for cashing out the troubled Redhill Peninsula?

Most of the owners of the luxury property under the spotlight for its illegal structural scandal after the record rainfall since early September withdrew their sale offer but one seller is slashing its price by 30 per cent in the last two weeks.

According to a local newspaper, a seller revised the offer price of its detached house to HK$67 million, or about HK$21,320 per square feet.

The four-bedroom unit also includes a 834 square feet garden and 1,315 square feet balcony for the official record.

But the offer was about 30 per cent down from its original offer of HK$96 million since mid-2022. The owner was believed to have revised the price to HK$80 million immediately after the rainfall billed as the worst in the century, if not 500 years as the government suggested, on September 7.
Now the offer was HK$67 million, compared to his purchase price of HK$111.5 million six years ago.
That hurts.

Market estimates the type B detached house at the seaside ranged from HK$70 million to HK$150 million before the rainfall. There were 40 Redhill Peninsula houses on sale, with 10 on monthly rental between HK$100,000 and HK$150,000.

Some 70 of the 85 units at Redhill Peninsula were deemed to have illegal structure, of which 40 was said to have illegally occupied the government land.

The Building Department immediately demanded the houses of No.70, 72, 74 and 76 to remove the illegal structure.

As such, the market for Redhill Peninsula is pretty much dead. Homeowners basically took back their keys from their agents because they worried the government would send undercovers to examine their homes for illegal structures.

The cost of purchase would be even higher now the government stepped in with an aim to clear the illegal issues once and for all.

Of course, there were already building consultants offering owners to rebuild these houses. But given the poor secondary home market, which recorded a four straight month decline and wiped out all the gains this year, prospective buyers are still waiting for more bargains.

As such, the transaction at Redhill Peninsula will be slow. But no one should worry the financial power of these owners, many of whom are high-profile bankers or private equity owners.
Just that they would probably mark down their assets and pay more professional bills.

-- Contact us at [email protected]

Ben Kwok

EJ Insight writer