New railway to drive up residential demand in Tokwawan

The completion of Tuen Ma Line is expected to benefit home prices in the area.

Residential demand in the Tokwawan area is expected to rise after the completion of the Tuen Ma Line, JLL said in a report.

The Tuen Ma Line, which is the longest rail line in Hong Kong, started operation on 27 June. It links the east and west of the New Territories and East Kowloon, and connects Tokwawan, which was previously unserved by the rail network.

JLL said that plans for new rail lines have historically led to an increase in capital values that will outperform the market as seen in the case of Kwun Tong line extension.

This, however, was not observed when the Tuen Ma line plan was announced.

"We believe the residential demand should increase in the area in the foreseeable future given the improved connectivity, especially after the full completion of Shatin to Central Link in 2022 with the extension of East Rail Line across the harbour to Wanchai and Admiralty,” Nory Lee, senior director of Projects Strategy and Consultancy Department at JLL in Hong Kong, said.

“As a result, if history repeats, then there should be room for residential prices in the Tokwawan area to climb further and even outperform the overall market."

Mass residential prices in Tokwawan have increased by 57% since the gazettal of the Tuen Ma Line in November 2011, which, according to JLL, is slightly weaker than the 66% and 72% increases recorded for Kowloon and overall, Hong Kong respectively.

“There are five residential redevelopment projects with a total of 3,070 units set to be launched by URA in the coming financial year,” Nelson Wong, head of research at JLL in Greater China, said.

“The new rail line will further unlock the redevelopment potential of Tokwawan and is expected to attract the developers' attention,” Wong added.