A mystery buyer splurged HK$150 million (US$19.3 million) to snap up 26 new flats in Hong Kong’s Kai Tak district in a one-day shopping spree.
The flats were acquired in projects such as Double Coast 1 and Twin Victoria, whose developers extended discounts to buyers when they were launched earlier this year, according to agents.
The buyer is looking at the purchases as a long-term investment with an eye on leasing, said Sammy Po Siu-ming, CEO of Midland Realty’s residential division.
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The district, which is the site of Hong Kong Kong’s former airport, was the main reason for the massive investment, Po said, citing fellow agents as his source. He also declined to say whether Midland was involved in any of the deals.
The 320-hectare (790 acre) Kai Tak Development is billed as Hong Kong’s second central business district, with commercial and entertainment projects such as the Sogo shopping centre and Kai Tak Sports Park, which occupies an area of nearly 28 hectares. The main stadium can accommodate as many as 50,000 spectators and has a retractable roof and flexible pitch surface.
Kai Tak accounted for the highest first-hand home sales this year amounting to HK$33 billion as of November 17, according to data compiled by Midland.
“This reflects the attractiveness of Kai Tak,” Po said. Kai Tak is one of the most worthwhile investment areas in recent years, with rental yields of more than 4 per cent, he added.
Talent attracted to Hong Kong under the government’s “Top Talent” and “Quality Migrant” schemes from mainland China prefer newly developed residential areas such as Kai Tak, he added.
Double Coast 1 has been developed by a consortium comprising Henderson Land Development, Wheelock Properties, New World Development and China Overseas. The project was launched in October, with the first 78 units priced at HK$17,899 per square foot on average. The price was about 3 per cent lower on average than flats in Twin Victoria launched a month earlier.
“Mainland buyers love projects that are equipped with everything from restaurants to malls, and they love new flats,” Po said. “The investor is relying on these potential buyers in case he decides to resell the flats.”
The transactions, completed on Wednesday, will inject some confidence into the residential property segment that has been affected by rising geopolitical tensions as well as uncertainty over the pace of interest rate cuts in coming months.
“Although the recent performance of the property market has been mediocre, I trust that next year various developers will accelerate the pace of new property launches, which will lift the overall property market sentiment,” Po said. “The [likely] interest rate cuts by the Federal Reserve will benefit overall residential transactions and lead to a simultaneous recovery in property prices.”
On Wednesday, JLL predicted a 5 per cent decline in property prices of mass residential units next year because of a supply glut, a potential worsening of US-China trade relations and an uncertain interest rate outlook.
JLL cited an estimated supply of 87,000 new flats, equivalent to 58 months of demand, by the end of 2025 as the main reason for its pessimism.
Peers Knight Frank and Cushman & Wakefield, however, took the opposing view, predicting an increase in home prices of as much as 5 per cent next year.
In November, sales of new and lived-in home rose by more than a third to 6,298 units, according to official data. Meanwhile, an official second-hand home index gained 0.62 per cent month on month in October, the first positive reading in seven months.
However, transactions of new developments noticeably slowed from mid-November onwards and there was not much activity on the secondary market either, according to Centaline Property Agency.
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