Around 13 units will be available between 2018 and 2020.
The supply of new luxury residential homes located at the widely sought after posh district Peak is expected to crash to an average of 13 units per year between 2018 and 2020 from 36 units in the past three years, according to real estate consultant JLL.
New supply at the Peak is expected to contribute a measly 2% of Hong Kong’s total luxury supply over that period.
“As new residential supply on the Peak will decrease significantly in the next few years, we believe developers will be aggressive in bidding for the government’s Mansfield Road residential site. The site will be one of the major sources of new housing supply on the Peak,” Henry Mok, regional director of capital markets at JLL, said in a statement.
Despite the lower supply, residential and land prices at the Peak remained heated in spite of a higher interest rate environment dampening the rest of the residential market. Capital values at the Peak sustained its positive momentum after rising by 7.1% in Q3 which extends the 5.8% growth recorded in Q2.
The Peak was also able to weather the slowdown in the posh homes market as capital values in the overall luxury market slowed from 4.6% in Q2 to 3.9% in Q3.
Also read: Rents for posh apartments slow to 1% in Q2
“We believe there is still potential for growth of residential prices in the area. With availability remaining extremely tight, it would be no surprise to see more record-breaking transactions in the coming months, even as momentum in the broader residential market slows,” Cathie Chung, National Director of Research at JLL said in a statement.
Photo from Mk2010 - Own work, CC BY-SA 3.0
Do you know more about this story? Contact us anonymously through this link.