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Hong Kong’s iconic Peak Tram set to return to service after year of renovation
The Hong Kong Monetary Authority in March raised the city’s base rate to a 15-year high of 5.25 per cent, after the US Federal Reserve increased its target rate by a quarter point to a range of 4.75 per cent to 5 per cent. However, Hong Kong’s major lenders did not follow suit. HSBC and Bank of China (Hong Kong) kept their best lending rates unchanged at 5.625 per cent, while Standard Chartered kept its prime rate unchanged at 5.875 per cent.
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The pause in lending rates by the city’s three currency-issuing banks has boosted hopes that homebuying activity will continue to increase in the coming months, as mortgage rates are likely to stabilise. Sales of new and lived-in homes could hit 66,000 units this year, up nearly 50 per cent from 2022, according to market observers.
“Since the full border reopening earlier this year, the Hong Kong luxury residential market has seen signs of recovery across both transactions and leasing,” said Steve Lam, senior director, capital markets and investment services, Colliers Hong Kong. “Driven by mainland buyers, transactions in the primary market have gained momentum, with transaction prices holding up strongly.
“For example, a few new projects in Kowloon have recorded transaction prices of over HK$50,000 per square foot. The ultra high-end market has also seen improved sentiment, with multiple single-lot houses reaching final stages of negotiations. We expect the luxury residential market to keep up the momentum and post even stronger growth in the second quarter.”
Vincorn’s Cheung, on the other hand, pointed to some “sluggishness” in the luxury property market.
Earlier this year, a four-bedroom luxury home in Mount Nicholson resold at an estimated loss of about HK$130 million. The home, in one of the most expensive luxury developments in Hong Kong, set a record for Asia when it sold for HK$519.9 million in 2019. It sold on January 27 to a buyer named “Yu Ye” for HK$390 million, about 25 per cent below the price “Li Jun” paid for it, according to official records.