Last month saw the world’s most expensive house per square foot go on the market at HK$820 million. Its location; Hong Kong’s Victoria Peak district, affirming Hong Kong’s position as one of the hottest places for property investment. The city’s booming real estate market shows no signs of slowing down either, with factors like low interest rates and positive currency performance contributing to its meteoric rise. Despite tight government control over development and issues of limited building space, the market continues to attract both local and overseas buyers looking to make a prudent investment.
Due to low interest rates in Hong Kong and in many countries overseas, it really is a buyer’s market. Luxury property in the Peak and Mid-Levels area is a popular choice, while up and coming areas like Kowloon are seeing significant investment in redevelopment and new builds, thanks to available space and improved transport links to the city centre.
The stability offered by the Hong Kong dollar’s peg to the US dollar is key to foreign investment. Hong Kong’s healthy economy makes it a good bet for buyers wishing to safeguard assets, contrasting with countries hit heavily by recession in recent years. Although a 15% tax was introduced in 2012 on property purchases by overseas buyers, foreign investors seem undeterred.
Thanks to its geography, Hong Kong has always lacked land for new building and development. Naturally, as time goes on the situation is exacerbated, thus putting pressure on existing property and pushing the prices up further. Moreover, as development moves on from the city centre and revitalises new districts, property values and demand in these areas increase.
Despite measures brought in by the government to incentivise local buyers in the past few years, Hong Kong property remains popular with foreign investors. Restrictions include the 15% tax for non-local buyers and an increase in stamp duty on the resale of recently purchased real estate. Although there has been a healthy response from the home market following these changes, this has only fuelled an already competitive market. Since the introduction of these new property taxes, house prices have continued to rise and they’re showing no signs of stopping yet. Furthermore, the government’s latest budget pledged to produce 470,000 new residential units in the next ten years, as a means of closing the gap between supply and demand.
With property prices at an all time high and still rising, there’s no better time to invest in real estate in Hong Kong. At Engel & Völkers our experienced agents can advise you on all aspects of brokerage; visit our website or our central Hong Kong office to discuss your next property investment.