Hong Kong
Hong Kong started out as a regional trading port under Chinese rule, and remained so until a conflict with Britain over the city’s refusal to import opium ended with it falling under British control in 1842. Over the following century its population quickly expanded and it developed into one of the key Asian industrial territories. It ceded from the United Kingdom in 1997 when sovereignty was transferred to the People’s Republic of China. Today, with a population of 6.9 million people, Hong Kong is one of the world’s most densely populated areas.
Known for its exquisite city skyline set in an almost incongruous natural setting, Hong Kong remains one of the world’s leading financial capitals and a major business and cultural hub. Its identity as a cosmopolitan centre where east meets west is reflected in its cuisine, cinema, music and traditions, and although the population is predominantly Chinese, residents and expatriates of other ethnicities form a small but significant segment of society.
Condos in Hong Kong
Foreigners can generally buy properties such as apartments and condominiums in Hong Kong and rent them out without restriction. However, residents of some countries – including mainland China – cannot buy real estate in Hong Kong. Prices range considerably and a luxury flat in Hong Kong currently hold the record for the world’s most expensive. The flat is located in a complex called The Arch, in Hong Kong’s Kowloon area. At a total of 5, 497 square feet, the apartment has views of Victoria Harbour, a private swimming pool and a rooftop terrace. The 80th floor penthouse reportedly sold for $28.8 million or $41,000 per square foot. More on buying condos in Hong Kong.
Houses and land in Hong Kong
Buying land in Hong Kong is a more difficult feat than purchasing condominiums or apartments. Firstly, the government owns nearly all of the land and can at its whim release parcels of that land for sale, thereby affecting the market directly. Land cannot be purchased freehold, but rather on a renewable leasehold basis. Land leases are presently being granted for 50 years, though in the past they have been issued for 75, 99, or 999 years. More on buying houses and land in Hong Kong.
Top tips for Hong Kong property
Here are ten insider tips for figuring out the Hong Kong property industry.
More on top tips for Hong Kong property.
Due to Hong Kong’s strong economy, its residential property sector has long flourished, although several road bumps have appeared along the way, the most notable being the SARS outbreak in 2003 and the market crash of 1997.
Foreigners can generally buy properties such as apartments and condominiums in Hong Kong and rent them out without restriction. However, residents of some countries – including mainland China – cannot buy real estate in Hong Kong. |
Buying land is a more difficult feat. Firstly, the government owns nearly all of the land and can at its whim release parcels of that land for sale, thereby affecting the market directly. Land cannot be purchased freehold, but rather on a renewable leasehold basis. Land leases are presently being granted for 50 years, though in the past they have been issued for 75, 99, or 999 years.
Although 2006 was less than stellar, Hong Kong’s property market is expected to pick up in 2007 as all sectors of real estate recovered well by the fourth quarter of the year and some such as office and high-end residential recovered exceptionally well.
It’s an attractive time for investors looking to purchase luxury grade property to lease out, as rental rates are expected to rise by just under 10% and capital values could go up by as much as 20% during the year, buoyed by an increased number of wealthy locals and a growing number of international and Chinese companies that are establishing a presence there.
This also makes it a prosperous time for luxury residential property owners, as a series of positive developments have provided a solid base for further increases in capital values. Many stock investors were preparing to maximize their portfolios by investing part of their gains into other fixed asset items such as houses and apartments in traditional luxury residential districts, in order to achieve more stable returns.
Because of Hong Kong’s sprawling residential make-up, it’s difficult to define exactly which areas are the most popular in terms of high-end property, given that luxury developments exist just about everywhere. That said, there are several areas that are particularly attractive for all the usual reasons: accessibility, views and facilities.
These areas include Island East, Happy Valley, The Peak, Hong Kong Island South (Stanley, Repulse Bay, Deep Water Bay), Wanchai and the Kowloon Peninsula – Kowloon Tong.
The bar for luxury residential real estate in Hong Kong, already one of the most expensive areas in the world, was recently raised, placing The Peak at the height of the city’s luxury market. Sitting 1,811 feet above sea level, this is the highest point on Hong Kong Island and has long been a hotspot for wealthy investors, dating as far back as the 19th century. It’s a tourist attraction as well, offering spectacular, 360-degree views of all of the surrounding islands.
In late 2006, The Peak became the site of the most expensive residential piece of land in the world. The government land auction of 12 Mount Kellett Road fetched HK$1.8 billion. Sun Hung Kai Properties paid a record HK$42,196 psf, 134 percent of the opening bid.
Because the property market is set to keep rolling ahead, owners are now content to wait for higher bids for their luxury residential properties due to the overall upward adjustment in asking prices triggered by recent land sales. Many investors are reluctant to rent out their luxury houses or apartments since it would weaken their flexibility in selling the property.
It must be noted that Hong Kong is not an easy market to enter, given that its high-end residential market is the third most expensive in the world, after London and Monaco. In addition, because all land belongs to the government; those who buy property actually buy an agreement or a lease. According to the laws governing the real estate sector theoretically anyone is entitled to own whether as an individual or through a company structure.
