The Peak, Mid-levels and Southside lead demand among both local and expatriate families due to their prestigious Hong Kong Island location, their proximity to Central and a strong international school network. However, the increasing supply of residential flats and school campuses in other areas have prompted more tenants to look beyond these traditional luxury districts.
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New international school campuses and high new supplies of housing in Kowloon and the New Territories are garnering the attention from professionals and expatriates looking to lease larger flats. We have observed that Tseung Kwan O and Tai Po, which have a total of four new international school campuses opened during 2018/19, have been slowly gaining popularity and are increasingly desirable for young professionals with lower spending power than their more senior colleagues.
According to Colliers’ estimates, the rental spread between Hong Kong Island, Kowloon and the New Territories is wider for larger units. For instance, a three-bedroom apartment on Hong Kong Island could cost 60-80% more than that in the New Territories. With reference to the latest market transactions, with a monthly rent of about HKD40,000 (USD5,130), tenants can choose between a 745 sq ft two-bedroom luxury flat at Bel-Air in Pok Fu Lam (Hong Kong Island) or a 1,144 sq ft three-bedroom luxury flat at Mount Pavilia in Clear Water Bay (New Territories).
Looking ahead to the rest of 2019 and 2020, Tai Po and the Sai Kung District (which includes Tseung Kwan O and LOHAS Park) are planned to have the largest quantity of new residential supply, with 7,513 and 6,578 units, or 18.5% and 16.2% of total supply, respectively. Meanwhile, these areas should also provide a high quantity of large units, with sizes of over 1,076 sq feet (100 sq metres).
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Nigel Smith is the Managing Director of Colliers International, a global real estate company operating in 68 countries.
With over 30 years of real estate experience, Nigel is an expert in Hong Kong’s property market and has delivered outstanding results for many developers. Most recently he worked on 50 Connaught Road Central, a project which achieved the highest rents in the world and the highest capital value per square foot in Hong Kong.