International Real Estate: House Hunting in … Hong Kong
Two Bedrooms in the Heart of Hong Kong
$5.3 MILLION (41.8 MILLION HONG KONG DOLLARS)
This two-bedroom, two-and-a-half-bathroom apartment is in the western section of Mid-Levels, an affluent residential area built into the northern slope of Victoria Peak on Hong Kong Island, in Hong Kong.
The loft-like 1,215-square-foot unit is one of seven penthouses at Merry Court, a 20-story, two-tower high-rise constructed in 1970 with 139 units. Its alfresco rooftop terrace offers sweeping views of Central (Hong Kong’s business district), Victoria Harbour and the Kowloon Peninsula to the north.
Concrete walls, exposed beams, tall windows, wood floors and an open layout give the home an industrial feel. A renovation three years ago eliminated the maid’s quarters and “made it much more spacious,” said Charis Chan, the head of international projects for List Sotheby’s International Realty, which has the listing.
From the elevator landing, which is shared by four apartments, the front door opens between the kitchen-and-dining and living areas. Bar seating makes the kitchen an entertaining hub. The oversized, granite-topped island has a built-in five-hob cooktop and wok ring, with a rectangular fan hood above and storage below. The Siemens refrigerator and dishwasher have the same glossy white finish as the cabinets, and the wine fridge has a black surround. Close to the entry, floor-to-ceiling steel cabinets have a rusty finish. A powder room is across from the kitchen.
The lighting and speakers are controlled through a smart-home system. The furniture is not included in the price, but is available to buy, Ms. Chan said.
Beyond the living and dining areas are two bedrooms. Each has an en suite bathroom with a patterned ceramic-tile floor and a granite-topped vanity. The master bedroom has a walk-in closet and room for a queen-size bed. Slightly smaller, the second bedroom has a built-in wardrobe.
An indoor staircase, open to the living area, leads to a 918-square-foot rooftop terrace, which has outdoor seating and dining spaces, as well as a kitchen and minibar. A sailcloth provides shade, and windscreens line the perimeter. A washer and dryer are also on the roof.
The apartment comes with a covered parking space on the ground floor of the podium-style building.
The Mid-Levels West area of Hong Kong is teeming with ultraluxury condos and tiny bachelor pads. This apartment is a 20-minute commute to the city’s business district via a chain of 20 covered outdoor escalators, the longest series in the world. Along the flow of moving stairs and inclined moving walkways are supermarkets, convenience stores, specialty shops, pubs, coffee shops, restaurants and wet markets selling fresh poultry, pork, and fish and reptiles. Mid-Levels West also has a number of international schools, among them the University of Hong Kong and King’s College. The apartment is about 35 minutes by car from Hong Kong International Airport.
Hong Kong has three main regions: Hong Kong Island, Kowloon and the New Territories. Even with an 8 to 10 percent drop in prices and sales volume between last August and the end of 2018, the city remains — for nine years running — the world’s most expensive housing market.
The “downhill ride” was sparked by the trade war between the United States and China, said Koh Keng Shing, the founder and chief executive of Landscope Christie’s, in Hong Kong. Other factors included interest-rate hikes in the United States, the “slowdown of China and Hong Kong’s economies, and uncertainties brought by Brexit,” he said.
According to the government’s Rating and Valuation Department, the drop halted a 28-month upward trend.
However, Binoche Chan, the chief operating officer of List Sotheby’s International Realty, said she saw “a strong rebound” at the beginning of this year.
Simon Smith, head of research and consultancy for Savills Hong Kong, agreed, attributing the “1 to 2 percent” pickup during the first quarter of 2019 to “a recovering stock market, ending of the current interest-rate hike and possible resolution of the U.S.-China trade conflict.”
The strongest areas of the market are the “very tiny flats and the super-luxurious,” Ms. Chan said, with prices reaching 130,000 Hong Kong dollars ($16,600) a square foot. Luxury buyers favor the Peak, South Side and Mid-Levels areas, with the “new rich” buying in the Kowloon Station district, she said.
Housing is less expensive beyond Hong Kong Island. In the first quarter of 2019, prices in Kowloon were 6 percent lower, and in the New Territories, Hong Kong’s northernmost region, they were 25 percent lower, Mr. Smith said.
To help ease the housing crunch, 97,445 units are expected to be built during the next five years, Mr. Smith said. Because of the scarcity of land on Hong Kong Island, new inventory will be created by razing old buildings for redevelopment. In Central and Western Hong Kong Island, one to two new buildings are expected to be built every year, said James Fisher, director of market analysis and analytics for Spacious Hong Kong, a real estate platform. There is more expansion in the Eastern District of Hong Kong Island, in Kowloon and in the New Territories.
In Mid-Levels, prices for a two-bedroom unit in an older building range from 18,000 to 20,000 Hong Kong dollars ($2,300 to $2,550) a square foot, Mr. Smith said, and new apartments generally sell for 35,000 to 40,000 Hong Kong dollars ($4,460 to $5,100) a square foot.
Who Buys in Hong Kong
Because nonresident buyers have to pay a 30 percent stamp duty, the vast majority of buyers in Hong Kong are mainland Chinese and locals, Ms. Chan said. Foreigners tend to rent, Mr. Fisher said.
“It is not a low-income immigration,” Mr. Fisher said, explaining that residents from mainland China have come to Hong Kong in the past 10 years for “middle-class and executive jobs” once held by British, American, Australian and European expatriates.
“It didn’t help that you had expats in Hong Kong costing so much more than other places in the world,” he said. “Companies thought about how they could localize more.”
The 30 percent stamp duty paid by foreign buyers is double the 15 percent paid by local buyers, Mr. Smith said. Legal fees are normally less than 0.1 percent, Mr. Koh said.
The buyer and seller each pay about 1 percent of the sale price in commissions.
Mortgages require 40 to 50 percent down on a first property, and are “a little harder” for foreigners to get, Mr. Fisher said. Interest rates run 2.1 to 3.5 percent. For a first purchase of more than 10 million Hong Kong dollars ($1.3 million), 60 percent down is required.
Some banks offer supplemental mortgages up to 80 percent, and developers can offer private financing up to 80 percent, “which improves the affordability,” Mr. Fisher said.
Hong Kong tourism: discoverhongkong.com
Rating and Valuation Department: rvd.gov.hk
Hong Kong Estate Agents Authority: eaa.org.hk
Languages and Currency
Chinese, English; Hong Kong dollar (1 Hong Kong dollar = $0.13)
Taxes and Fees
“There is no property tax in Hong Kong,” Ms. Chan said, noting that “all residential land is leasehold,” meaning it is owned by the Chinese government under 50-year land leases.
For this apartment, the quarterly government rent is 5,917 Hong Kong dollars ($750). The monthly maintenance fee is 1,800 Hong Kong dollars ($230).
Charis Chan, List Sotheby’s International Realty, 011-852-3793-3688; sothebysrealty.com
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Published at Wed, 17 Apr 2019 13:31:18 +0000