HONG KONG: Wheelock Properties Ltd sold a luxury home in Hong Kong’s exclusive Peak neighborhood to an unidentified buyer for a lower-than-expected price tag of HK$830mil (US$107mil) on Saturday.
While it took Wheelock just three hours to sell the home, the transaction works out to HK$87,784 per sq ft, more than 25% lower than estimates by some analysts.
The sale shows that the ultra-luxury segment isn’t immune from a downturn in the broader housing market in Hong Kong, where prices have fallen 11% since September and analysts such as Bocom International Holdings Co’s Alfred Lau are expecting declines of as much as 30% in 2016.
“I am very surprised,” said Danny Leung, principal senior account manager in the stately homes division at Centaline Property Agency Ltd who expected the home to fetch as much as HK$120,000 per sq ft.
The five-bedroom, 9,455 sq ft house, which boasts a swimming pool, garden and elevator, has unobstructed views of Hong Kong and Victoria Harbour, Wheelock said in a statement on Sunday. Its facade and interiors were designed by New York-based architect Robert Stern.The villa is the first of 17 units offered for sale at the Mount Nicholson project jointly developed by Wheelock and Nan Fung Development Ltd, and was offered by tender between 10 am and 1 pm “to test the waters” and gauge market demand, the company said in an e-mail. The sale price was the highest of five offers made for the home, and Wheelock said it was “satisfied with the result and is positive about the property market.” David Ji, Knight Frank LLP’s head of research and consultancy for Greater China, said that given the lower-than-expected price, Wheelock won’t be in any hurry to release more houses, translating into a slowdown in sales.
“This year there are lots of uncertainties,” he said. “This is a very expensive, prestigious development and they would rather not sell it cheaply.” In November, Swire Properties Ltd sold the last apartment, on the 12th floor at its Frank Gehry-designed Opus Hong Kong project, for HK$509.6mil, or HK$93,609 per sq ft, according to Midland Realty. Analysts had expected the Mount Nicholson sale to exceed this price because standalone properties typically command a premium over apartments.
Stamp duty on the Mount Nicholson property could amount to about HK$35.3 mil for a first-time Hong Kong resident buyer, while a non-resident would need to pay around HK$195.1mil in duties, based on Hong Kong government stamp duty rates.
The most expensive sale of a Hong Kong property was HK$1.5bil for a house at 22 Barker Road, on the Peak, sold to Alibaba founder Jack Ma (pic) in August, the South China Morning Post reported at the time. — Bloomberg