Hong Kong has been rocked by protests and a pandemic that has virtually shut the city out of the world, but high-end real estate deals are booming, backed by mainland entrepreneurs.
Two apartments were sold this week by Wheelock, billionaire Peter Woo’s real estate group, on the city’s famous Peak for HK $ 1.2 billion. (US $ 154m), which set an Asian record for price per square foot. The sale followed a separate agreement from the real estate group Wharf Holdings to rent a luxury house for HK $ 1.35m. month, another record for the city.
Real estate transactions are coming despite Hong Kong facing a number of challenges that have raised questions about its prospects as an international financial center.
Beijing cracked down on the city after pro-democracy protests in 2019 by enacting a harsh national security law to curb disagreement.
These changes, along with some of the world’s strictest pandemic border restrictions with mandatory quarantine measures of up to three weeks for anyone traveling to the city, have caused many residents to leave the city. Hong Kong recorded a 1.2 percent decline in population in the first half of this year, the third consecutive decline over a six-month period after more than a decade of growth.
But housing prices have been stabilized by a chronic shortage of land, which has been blamed in part for property developers hoarding territory and political missteps.
Henderson Land, the real estate group controlled by Lee Shau Kee, one of Asia’s richest men, said this month it would spend HK $ 63 billion. on a record-breaking 50-year tender to develop a waterfront in central Hong Kong.
“If you think about the kind of challenges that Hong Kong has faced over the last two years, from tensions between the US and China, to social unrest, to the pandemic, and yet the housing market has proven to be quite resilient, and we “Continued to see agreements blackened at the top end,” said Simon Smith, head of Asia-Pacific Research at Savills, the real estate company. “The market here always seems to be bulletproof.”
Nelson Wong, head of research for Greater China at JLL Hong Kong, the commercial real estate company, said the housing shortage had offset the impact of the population decline.
“The demand for housing is still not being adequately met by what is available out there,” he said.
Wong added that the number of housing transactions of more than HK $ 100 million. was higher than in 2018.
The identity of the buyer of the Peak apartment has not been revealed, but Smith said the high-end market was increasingly supported by mainland entrepreneurs. Many of them have business across the border in southern China but want to live in Hong Kong.