Hong kong apartment breaks records, as price correction looms
Photo: Swire Properties
An apartment in Hong Kong has broken the record for the most expensive apartment in Asia. The HK$509.6m sale is one of several record-breaking transactions in Hong Kong this year, but experts are warning that prices may fall in the coming year.
An apartment in Hong Kong has broken the record for the most expensive apartment in Asia.
The last unit in the iconic OPUS development fetched HK$509.6 million in November 2015, making it the priciest apartment sale ever recorded on the continent.
The 5,444 sq. ft. property is located on the 12th storey of the Opus Hong Kong block on Stubbs Road and includes a 1,508 sq. ft. rooftop and two car parking spaces.
It is not the first record sale made in 2015, though. Even more strikingly, it occurs against a backdrop of financial turbulence and uncertainty.
Sharp corrections to both the Hong Kong and China stock markets in recent months have dampened investment sentiment across most property sectors, notes Savills. Investment bank analysts, meanwhile, are cautioning that Hong Kong prices are heading for a correciton this year, as a result of the slowing economy.
The prime market, though, continues to buck the trend, with wealthy buyers undeterred.
"This transaction underscores our earlier estimate that the high-end and super-luxury sector will buck the downward pressure on the overall market and continue to grow into next year," Sammy Po Siu-ming, chief executive at Midland Realty’s residential department, tells SCMP.
Indeed, the sale marks another landmark deal for OPUS. Following the sale of a duplex unit as the most expensive apartment in Asia in Q2, OPUS saw another duplex sold for HK$459.6 million (HK$95,372 per sq ft saleable) in Q3, together with three other simplexes for an average price of around HK$75,000 per sq ft saleable.
Luxury transaction volumes on Hong Kong Island rebounded to 155 in Q3/2015, a 27 per cent year-on-year rise, according to Savills, and the highest since the introduction of DSD in Q1 2013.
Nonetheless, the adviser warns that the luxury residential prices could be about to tip off the edge.
"With investment prospects dwindling, an interest rate rise imminent and supply likely to increase modestly, luxury residential prices may decline by 10 per cent next year, and primary sales, especially in Mid-Levels, may face stiffer competition with more project launches."
The super prime segment, though, is expected to see interest continue.
"We estimate overall property prices will fall between 3 per cent and 5 per cent next year, but the high-end sector to grow 5 per cent to 10 per cent," predicts Mr. Siu-ming.
"Turnover of the high-end sector is also expected to rise by 20 per cent."
If more niche products are launched next year, admits Savills, we "may see more records broken".