Luxury residential market sees best performance since second quarter of 2019
International property consultant JLL's latest Residential Sales Market Monitor report shows Hong Kong's luxury residential capital values saw a 0.8% rebound q-o-q in the first quarter of 2021 after dropping 8.2% in 2020, while luxury rents remained largely flat with a mild drop of 0.2% q-o-q; both recorded the best performance since the second quarter of 2019.
Following a drop in infection cases in the city, home viewing became more active and buying sentiment improved over the quarter. A total of 42 properties priced over HKD 100 million changed hands in the first quarter of 2021, about 31% higher than the quarterly average last year, though still much lower than historic levels. Total consideration was also about 55% greater than that in 2020.
JLL noted that, senior executives of the mainland Chinese corporates have been active in Hong Kong's luxury market, with an ex-senior executive of a mainland China technology company making a notable purchase of a house on 77/79 Peak Road for HKD 598 million in February.
Nelson Wong, Head of Research at JLL in Greater China said, "While we are seeing signs of improved buying sentiment in the residential market, we must hold cautious optimism in terms of how quickly the luxury residential segment will recover, as sales velocity remains slow. Specifically, the market can be tempered by factors such as the potential introduction of the vacancy tax, which will push developers to proactively launch more high-end inventory units and exert some price pressure in the near term."
Norry Lee, Senior Director of Projects Strategy and Consultancy Department at JLL in Hong Kong also commented, "Market sentiment continues to climb upward, with March recording an 108.3% m-o-m increase in residential transactions of properties over HKD 50 million. As more mainland Chinese firms list and set up business in Hong Kong, we foresee employees of such mainland Chinese corporates forming a solid source of demand, which will continue to grow as they attain Hong Kong residency status over time."