Luxury Residential Sales in Hong Kong Hits Historic High in 2021
According to JLL's latest Hong Kong Residential Sales Market Monitor Report, the luxury residential market in Hong Kong swiftly picked up in 2021 after a relatively quiet 2020. Transactions of high-value units (over HKD 100 million) in the first nine months hit a historic high.
Year-to-September, transactions of luxury residential units (consideration over HKD 100 million) grew by 131.4% year-over-year to 199, representing a 23.6% increase over that in 2018 when the market was also buoyant.
Despite the strong economic recovery in Hong Kong to date, the significant surge in activities is remarkable, especially considering the strict travel restrictions that have potentially kept some offshore capital from entering the market. Since 2019, luxury residential property prices have corrected more steeply than the mass and medium sector, and the pandemic further dampened sentiments in the luxury sector in 2020.
Figures from JLL show that the luxury residential capital value dropped 12.6% in 18 months, between mid-2019 and end-2020. Entering 2021, as prices were perceived to have sufficiently corrected, buying sentiments began to return and transactions rose. Many high-net-worth families bought luxury homes for investment purposes for their rarity values. Consequently, luxury residential capital value rebounded by 5.7% up to 3Q21, though it remains 7.6% below the peak level.
Norry Lee, Senior Director of Projects Strategy and Consultancy Department at JLL in Hong Kong said, "Plenty of high-value units are available for sale, notably in the primary market. A total of 478 E-class residential units (saleable area over 160 sqm) are expected to be completed in 2021, which represents an increase of 83.8% from 2020. As newly launched luxury units can typically command visible premiums over their secondary counterparts, a larger supply naturally contributes to a higher transaction volume, notwithstanding the slow sale pace in respective projects." Read More…
