Home on Hong Kong’s Peak Sells at $4.5M Loss

A house on tony Barker Road in Hong Kong’s luxury district on The Peak has sold for HK$530 million ($68.4 million), representing a loss of HK$35 million, the Hong Kong Economic Times reported, as luxury prices in the SAR are expected to tumble nearly 14 percent this year.

Real estate lawyer Vivien Chan purchased House 3 in 28 Barker Road from what is now CK Asset for HK$542 million in 2015 and put the home back on the market for HK$830 million in 2018, according to local media reports. The buyer of the house, which has a saleable area of 4,270 square feet (397 square metres) has not been identified. The latest transaction prices the property at HK$125,877 per square foot.

The HK$35 million figure takes into account a HK$12 million decrease in the asking price and an additional HK$23 million in payable stamp duties. The home’s value fell 36 percent in its two years on the market.

Adding to Barker Road Mega-Sales

Barker Road is among Hong Kong’s most elite addresses. In 2015, Alibaba founder Jack Ma reportedly paid HK$1.5 billion for a home at 22 Barker Road, and Henderson Land magnate Lee Shau-kee picked up 35 Barker Road in 2010 for HK$1.82 billion. Hutchinson Whampoa, a precursor of Li Ka-shing’s CK Asset, developed 28 Barker Road as a set of ultra-luxury terrace homes, referred to locally as villas, ranging from 2,000 to 8,000 square feet with the project coming to market in 2013.

In addition to the cut rate sale of House 3 at 28 Barker, mainland tycoon Qian Fenglei was reported to have lowered the asking price for House 7 in the project to HK$1 billion from HK$1.15 billion. The markdown added to a bad month that the Ant Financial Group investor and buddy of Jack Ma suffered after first seeing the fintech group’s IPO cancelled and then last week suffering wounds in a knife attack in Wan Chai.

In addition to purchases by Qian and Chan, another buyer purchased the more than 6,800 square foot House 8 in the project for HK$700 million in 2013, and the almost 5,700 square foot House 2 found a buyer for HK$530 million the next year. House 5 also sold at a 26.5 percent discount early last year.

High End Market Dries Up

Although the luxury sector is still buzzing from Hang Lung’s September purchase of 37 Shouson Hill for HK$2.5 billion, sales of high-end homes slowed in the three months ending 30 September, according to Savills.

Prices on Hong Kong Island and in Kowloon “declined marginally by 0.1% and 0.5% respectively in [the third quarter] with only a handful of distressed assets changing hands”, the agency said in its research for the period.

Among the few high-end properties that did change hands in recent months, a site zoned for development of around 10,000 square feet in Jardine’s Lookout sold for HK$850 million in August. In Kowloon Tong, another development site sold in September for HK$238 million. Additionally, a 6,720 square foot property in Clear Water Bay fetched HK$368 million in August.

Overall, luxury prices have fallen 8.6 percent from their 2019 peak, and Savills expects them to fall a further 5 percent this year despite support from low interest rates and market liquidity. The brokerage predicts that rates for high-end homes in the city could decline another 10 percent in 2021.

Regardless of that outlook, Wheelock Properties announced this week that it would launch for sale early next year a set of villas it has been developing on The Peak. The blue-chip developer will be making available by tender the set of homes at 77-79 Peak Road, with Wheelock managing director Ricky Wong telling the South China Morning Post that he expects the premium development beside the historic Ho Tung Gardens to attract interest from mainland tycoons.