New home supply at the Peak is set to fall to 13 units per year.
Less than 100 new luxury units sized 1,722 sq ft or above will be completed in The Peak, Southern district, Kowloon Tong, Homantin and Mid-Levels in 2019, according to a report from JLL.
The supply of new luxury residential homes at the Peak in particular, is projected to fall to an average of 13 units per year between 2018 and 2020 from 36 units in the past three years, according to an earlier report from JLL, which added that new supply is expected to contribute a measly 2% to total luxury residential supply over the three-year period.
Also read: Rents for posh apartments slow to 1% in Q2
Nonetheless, the luxury segment is proving to be more resilient to the ongoing housing downturn than the weakening mass segment. In fact, capital values in the mass residential property market having retreated by 4.2% since peaking at the end of August 2018 whilst capital values for the luxury segment, stayed largely flat in Q4 2018.
This trend can also be observed in the previous market downturn in 2016 when capital values in the mass segment fell by 10.1% whist the posh market segment saw a more controlled decline of 1.9%.
“Whilst the luxury residential segment is being supported by cash-rich investors that stay fixated on acquiring their dream homes, the mass segment is more sensitive to market sentiment and filled with buyers that are more pragmatic when making purchasing decisions,” Henry Mok, Senior Director of Capital Markets at JLL, said in a statement.
“Taking into account that there will less than 100 units completed in traditional luxury areas in 2019, the top-end of the market is likely to remain more resilient to faltering market sentiment through the current downturn, especially if it is shorter and milder than expected” he added.
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