Savills Residential Sales achieved excellent results in the first quarter of 2009, attaining a 100% market share for super luxury units transactions on the peak worth over HK$100 million.
Savills Residential Sales achieved excellent results in the first quarter of 2009, attaining a 100% market share for super luxury units transactions on the peak worth over HK$100 million. The accumulated transaction done by the team from 2008 till now has totaled over HK$6.6 billion. Peter Yuen, Senior Director and Head of Investment and Sales (Hong Kong and Macao), said compared to the volatile financial market, the local property market is healthy with stable fundamentals. The super luxury residential market is especially strong and its average price has already gone up over 10% in the first quarter this year.
Jimmy Fong, Head of Residential Sales (Hong Kong), said according to the land registry, there were 790 transactions worth over HK$10 million recorded in the first quarter of 2009, up 21.9% compared to 648 recorded in fourth quarter of 2008, reflecting that as the market consolidated, luxury buyers became active again.
Although a market downturn was seen in the third quarter last year, the real strength of the residential sales team became more prominent. Angel Law, Director of Residential Development and Investment, said the team transacted a number of super luxury residential transactions worth over HK$100 million after the financial tsunami (please click the below "Download Full News Story" to see the table), out of which the market share for transactions on The Peak reached 100%, including House B, No.28 Middle Gap Road, transacted at HK$110 million, House 3B, Nos.3-5 Gough Hill Path, transacted at HK$180 million, and Penthouse A, 5/F & 6/F, Altadena, No.27 Barker Road, transacted at HK$106 million.
Similarly, the team also concluded deals in Southside, including No.8 Belleview Drive which was transacted at HK$150 million, and House B, Nos.12-16 Tai Tam Road, which was transacted at HK$110 million. In total, the team’s market share of transactions over HK$100 million on The Peak and Southside recorded 71%. Savills’ Residential Sales team was under the spotlight as it was able to conclude these major deals under such challenging market conditions.
To conclude the results of the Residential Sales team since 2008 till now, the transaction amount totaled over HK$6.6 billion, said Keith Chang, Director of Residential Development and Investment. Among those were three transactions of whole block investment projects located in the traditional luxury residential districts, namely Kellet Grove at Nos.7 & 9 Mount Kellet Road, Majestic Court at No.9 Tai Tam Road, and Manchester Lodge at No.56 Tai Hang Road, Mid-levels East. These three transactions, by themselves, are already worth a total of HK$2.07 billion. Savills’ market share of whole block property transactions on The Peak, Southside, and Mid-levels East recorded a combined 78% market share in terms of transaction amount and around 50% in terms of transaction volume.
In explaining the recent activity for super luxury residential properties, Jimmy Fong pointed out that there are many cash rich investors in the market who are very eager to look for investment opportunities as interest rates are hovering at low levels. Since the stock market is very volatile, physical assets seem to hold better value. Therefore, there is a huge potential for money to pour into the local property market.
After the financial tsunami, the average price of luxury residential properties dropped around 30%, some even more excessively. Since the supply of prime properties in the traditional luxury residential districts has always been slim, for example, figures show that the new supply each year at The Peak and in Southside in the next three years will be less than 40 units on average, this type of property has strong support, and is the most sought after by buyers.
Jimmy Fong said his team has led the market and advised buyers to enter the market since late last year. With many of the prime properties were absorbed by seasonal investors and end-users, the market saw a strong rebound. The price of luxury units went up around 10% in the first quarter of 2009 compared to the previous quarter, out of which the price of the super luxury properties showed an even greater increase of between 10% to 20%. This reflects the resiliency of the super luxury units and those buyers have already made a profit on face value.
Peter Yuen concluded that if not for the world economic downturn, those super luxury units would rarely be available in the market. Savills’ Residential Sales team will continue to put a strong effort in this particular sector and has expansion plans to hire staff to further enhance the team’s strength. Right now, the team has a number of sole agent projects on hand. Peter Yuen expects that there will be more major transactions in the next two quarters.