Sky high prices for HK tower

Hong Kong may be the most expensive place in the world to buy property, with average prices 40 per cent higher than London’s, but even on this unashamedly wealthy island, the Opus project has raised eyebrows.

It is the superstar architect Frank Gehry’s first project in Asia Photo: AFP

Hong Kong may be the most expensive place in the world to buy property, with average prices 40 per cent higher than London’s, but even on this unashamedly wealthy island, the Opus project has raised eyebrows.

Each of the 12 apartments in the tower is expected to be priced at more than HK$ 450 million (GBP 37 million); a new test of the immunity of the world’s super rich to an economic downturn.

For their money, buyers can expect 360 degree views, private ground-floor or roof-top swimming pools and 6,000 to 7,000 square feet of open-plan space.

It is the superstar architect Frank Gehry’s first project in Asia. “You would not build this anywhere else,” he commented.

At a stroke, the Opus tower will join the likes of One Hyde Park in London and 15 Central Park West in New York in the ranks of the world’s most expensive apartment blocks.

Property prices in Hong Kong have soared more than 80 per cent since the financial crisis, fuelled by a wave of Chinese buyers from the mainland, some who arrived with suitcases full of cash. This year, prices have gone up another eight per cent.

After China announced a four trillion yuan (GBP 402 billion) stimulus package to offset the prospect of a global recession, more than half of the new luxury properties in Hong Kong were bought by mainland Chinese investors and prices at the high end rose by some 45 per cent.

Freya Beamish, an economist at Lombard Street Research, said property prices in Hong Kong had risen rapidly despite the fact that the demand for housing on the island had remained roughly the same. “The vacancy rates have not changed,” she said.

“It is more a case of excessive liquidity. There was nowhere else to put this money. People have been burned once or twice in the [Chinese] stock markets,” she said. Meanwhile, the Chinese government moved to restrict the mainland property market, pushing more money over the border into Hong Kong.

Partly as a result, Hong Kong’s wealth gap is now the biggest in Asia, with almost a fifth of the island’s population now living in poverty, and there have been large scale protests calling for the local government to bring down property prices and build more low cost housing.

For millions living at the other end of the scale, “coffin homes”, six-foot-long rooms created with plywood subdivisions, have become common.

Now, however, with China’s economy slowing, Hong Kong’s property market may begin to cool, according to economists. According to property agents there have been far fewer mainland Chinese buyers in Hong Kong since the start of the year.

“The supporting pillars for the residential market over the past two years are weaking,” said Tony Tsang and Jason Ching of Deutsche Bank in a research note, which predicts a 20 per cent fall over the next 12 months. Macquarie, the Australian bank, has said the market “looks precarious” over the next half-year.

Hong Kong’s financial secretary, John Tsang, has warned the market is “between ice and fire”, referring to the cooling of the global economy but the continued availability of cheap mortgages on the island. “The government will stay vigilant,” he vowed. “I will not hesitate to launch measures, when necessary, to keep the market healthy and stable”.

Meanwhile, some Chinese buyers are turning elsewhere. Last month, a Chinese couple paid $ 34.5 million (GBP 22 million) for a Versailles-style mansion in Beverly Hills, California. Over the last six months, several apartments in a Manhattan tower called One57, each with a $ 50 million price tag, have been snapped up by Chinese buyers.

Each of the 12 apartments in the tower is expected to be priced at more than HK$ 450 million (GBP 37 million); a new test of the immunity of the world’s super rich to an economic downturn.

For their money, buyers can expect 360 degree views, private ground-floor or roof-top swimming pools and 6,000 to 7,000 square feet of open-plan space.

It is the superstar architect Frank Gehry’s first project in Asia. “You would not build this anywhere else,” he commented.

At a stroke, the Opus tower will join the likes of One Hyde Park in London and 15 Central Park West in New York in the ranks of the world’s most expensive apartment blocks.

Property prices in Hong Kong have soared more than 80 per cent since the financial crisis, fuelled by a wave of Chinese buyers from the mainland, some who arrived with suitcases full of cash. This year, prices have gone up another eight per cent.

After China announced a four trillion yuan (GBP 402 billion) stimulus package to offset the prospect of a global recession, more than half of the new luxury properties in Hong Kong were bought by mainland Chinese investors and prices at the high end rose by some 45 per cent.

Freya Beamish, an economist at Lombard Street Research, said property prices in Hong Kong had risen rapidly despite the fact that the demand for housing on the island had remained roughly the same. “The vacancy rates have not changed,” she said.

“It is more a case of excessive liquidity. There was nowhere else to put this money. People have been burned once or twice in the [Chinese] stock markets,” she said. Meanwhile, the Chinese government moved to restrict the mainland property market, pushing more money over the border into Hong Kong.

Partly as a result, Hong Kong’s wealth gap is now the biggest in Asia, with almost a fifth of the island’s population now living in poverty, and there have been large scale protests calling for the local government to bring down property prices and build more low cost housing.

For millions living at the other end of the scale, “coffin homes”, six-foot-long rooms created with plywood subdivisions, have become common.

Now, however, with China’s economy slowing, Hong Kong’s property market may begin to cool, according to economists. According to property agents there have been far fewer mainland Chinese buyers in Hong Kong since the start of the year.

“The supporting pillars for the residential market over the past two years are weaking,” said Tony Tsang and Jason Ching of Deutsche Bank in a research note, which predicts a 20 per cent fall over the next 12 months. Macquarie, the Australian bank, has said the market “looks precarious” over the next half-year.

Hong Kong’s financial secretary, John Tsang, has warned the market is “between ice and fire”, referring to the cooling of the global economy but the continued availability of cheap mortgages on the island. “The government will stay vigilant,” he vowed. “I will not hesitate to launch measures, when necessary, to keep the market healthy and stable”.

Meanwhile, some Chinese buyers are turning elsewhere. Last month, a Chinese couple paid $ 34.5 million (GBP 22 million) for a Versailles-style mansion in Beverly Hills, California. Over the last six months, several apartments in a Manhattan tower called One57, each with a $ 50 million price tag, have been snapped up by Chinese buyers.

http://hala-pic.blogspot.com/2012/06/sky-high-prices-for-hong-kong-tower.html

 

Category: Hong Kong