The problem for Hong Kong is that it doesn’t have a lot of land available. About 75 percent of the land is protected or too mountainous to build there. As a result, construction in developed areas appears to be relentless. It is common to see new apartment buildings being constructed in the gaps between two existing towers in impressive use of space, but disregarding the view from residents’ windows.
Yet demand far exceeds supply, even with rising prices. The scarcity of land means that buying a property is seen as a long-term game. âIt’s still crazy. If there are 100 units in a new building under construction, it is normal for it to be oversubscribed more than 10 times, and it will have to go to raffle lots, âsaid Eunice Tenh, who is a real estate agent in the city for over 15 years.
The announcement that Hong Kong’s border will reopen with mainland China by June 2022 is already boosting the market, according to real estate agents. In November, just days after the border was announced, an apartment on Mount Nicholson in Hong Kong Island sold for HK $ 640 million, or HK $ 140,800 per square foot, a record in Asia.
âThe main developers in Hong Kong are all very optimistic about the market,â Tsang said. “Hong Kong is still considered the Monte Carlo of China.”
Hong Kong is now technically open to non-residents who are fully vaccinated, but anyone who moves or visits must self-quarantine in a hotel room for 21 days if traveling from 25 countries, including US and UK, or 14 days from almost anywhere else. The exception is mainland China: visitors from some provinces can travel without quarantine, although there is a strict limit; most vaccinated visitors from China must self-quarantine for seven days.
Hong Kong has imposed strict mortgage requirements in an attempt to control prices – with little effect. Buyers must deposit at least 40 percent of the value, and there are stricter rules for foreign buyers. Mortgage applicants with income primarily from outside the territory face a maximum loan-to-value ratio of 40% for properties over HK $ 10 million and 50% below that price.
To delay overseas speculation, Hong Kong introduced an additional stamp duty for buyers who are not permanent residents, which is a flat rate of 15% of a property’s value.
WHAT YOU CAN BUY FOR …
45.8 million Hong Kong dollars
A three bedroom apartment on Macdonnell Road in Mid-Levels Central, a short drive from the central business district. The property includes an additional maid’s room, a balcony and a parking space. For sale with Knight Frank.
55 million Hong Kong dollars
A four bedroom, three bathroom house with private pool and garden in a quiet hillside location. There is also a maid’s room, three parking spaces and a mountain view, as well as a partial sea view. In the market with Knight Frank.
HK $ 1.2 billion
A four bedroom detached house on Island Road in Deep Water Bay, South Hong Kong Island. Built in 2009, the property has a rooftop terrace with views of the bay and the hills. Available at Christie’s International Real Estate.
By Tabby Kinder Â© 2021 The Financial Times