Hong Kong has been rocked by protests and a pandemic that has almost shut the city off from the world but high-end property deals are booming, buoyed by mainland entrepreneurs.
Two flats were sold this week by Wheelock, the real estate group of billionaire Peter Woo, on the city’s famous Peak for HK$1.2bn (US$154m), setting an Asian record for price per square foot. The sale followed a separate deal by property group Wharf Holdings to rent out a luxury home for HK$1.35m a month, another record for the city.
The property transactions come despite Hong Kong facing a series of challenges that have raised questions about its prospects as an international financial centre.
Beijing clamped down on the city following pro-democracy protests in 2019 by imposing a tough national security law to limit dissent.
Those changes alongside some of the world’s strictest pandemic border restrictions, with mandatory quarantine measures of up to three weeks for anyone travelling to the city, have led many residents to leave. Hong Kong recorded a 1.2 per cent decline in residents for first half of this year, the third consecutive fall over a six-month period after more than a decade of growth.
But residential prices have been steadied by a chronic lack of land, which has been partly blamed on property developers hoarding territory and policy missteps.
Henderson Land, the property group controlled by Lee Shau Kee, one of Asia’s richest men, said this month it would spend HK$63bn on a record-setting 50-year tender to develop a waterfront site in central Hong Kong.
“If you think of the sort of challenges Hong Kong has faced over the past two years, from US-China tensions, to social unrest, to the pandemic and yet the residential market has proved to be pretty resilient and we have continued to see deals be inked at the top end,” said Simon Smith, head of Asia-Pacific research at Savills, the property company. “The market here always seems to be bullet proof.”
Nelson Wong, greater China head of research at JLL Hong Kong, the commercial real estate company, said the housing shortage had offset the impact of the population decline.
“The demand for housing is still not being sufficiently addressed by what is available out there,” he said.
Wong added that the number of residential transactions of more than HK$100m was higher than in 2018.
The identity of the buyer of the Peak flat has not been disclosed, but Smith said the high-end market was increasingly buoyed by mainland entrepreneurs. Many of them have business across the border in southern China but want to live in Hong Kong.