Deep Water Bay Home Sells for $111M in Hong Kong’s Priciest Deal This Year

A luxury villa in Hong Kong Island’s Deep Water Bay sold on Sunday for HK$870.2 million ($110.8 million), according to public records, in the city’s priciest residential transaction this year.

With the market for Hong Kong high-end housing continuing to outperform amid the city’s economic downturn, House 7 at No. 15 Shouson is the first of 15 detached homes in the project to have sold, with an unnamed buyer paying HK$108,346 per square foot of area to acquire the residential property through a tender which closed on 26 June.

“We have seen a significant increase in purchases and interest in Hong Kong luxury properties, and the upper luxury market in particular,” said Joshua Miller, CEO at Okay.com. “This is being fueled by a general undersupply of luxury properties and standalone houses, as well as a belief that capital from China will soon begin returning to Hong Kong, and to the property market specifically,” he added.

“The stock market downturn may also be leading buyers to seek refuge in real estate as a more stable investment, particularly if there are concerns of higher inflation in the near-to-medium term,” said Miller.

Shouson Hill Mansion

The 8,032 square foot (746 square metre) luxury home was one of two houses in the project at 15 Shouson Hill Road West on the south side of Hong Kong Island made available in the tender last week, according to the developers’ sales arrangements. Spanning 88,000 square feet of gross floor area, No. 15 Shouson was jointly developed by Emperor International Holdings, CC Land Holdings, Mingfa Group and CSI Properties Limited, according to Emperor International.

Located in Hong Kong’s exclusive Deep Water Bay neighbourhood the development gives buyers the chance to rub shoulders with the city’s uber-rich with billionaires like CK Asset’s Li Ka-shing and Alibaba co-founders, Shi Yufeng and Jin Yuanying residing in the area.

The new owner of House 7, a six-bedroom residence which is less than five minutes’ drive from Li’s mansion at 79 Deep Water Bay Road, will be able to enjoy features such as a private pool and garden, as well as an in-home elevator.

Also put put up for sale in a parallel tender ending the same day was the adjacent House 6, which covers 9,550 square feet, though a successful bid for that unit has not yet been announced.

“As the pandemic slows down and (Hong Kong’s) economy gradually returns to normal, the group expects that the high-end residential market shall follow,” said Alex Yeung, vice chairman at Emperor International in a press release announcing the name of the project in May. “With No.15 Shouson’s prime location and (exquisite design), I believe that the launch will be a market spotlight,” said Yeung.

At nearby luxury properties, such as SEA Holdings’ 1 Shouson Hill and Sun Hung Kai Properties’ Shouson Peak, selling prices for new homes averaged HK$90,000 to HK$101,000 per square foot over the last year, said Alex Leung, senior director at CHFT Advisory and Appraisal. He added that this initial sale “would have a benchmarking effect on other units.”

Luxury Slowdown

The Deep Water Bay tender is Hong Kong’s latest case of a luxury home going for a top price over the past two months, including three separate transactions totalling HK$664.5 million at CK Asset’s 21 Borrett Road.

Within this month a 20th-floor unit at the Mid-Levels project sold for HK$91,895 per square foot, setting a new record high price for a non-penthouse unit at the luxury residential property.

During May, a 2,771 square foot home in the first phase of Sun Hung Kai Properties’ Central Peak project in the Mid-Levels East sold for HK$288 million, or HK$103,934 per square foot, which set record high price per unit of area in that project, according to transaction records posted by the developer.

Despite the luxury market’s resilience, analysts are expecting high-end home prices to see a slowdown, with Vincorn Consulting & Appraisal’s managing director Vincent Cheung noting that luxury home prices “will increase by no more than 3 percent in 2022 – especially if travel borders between Hong Kong and the mainland remain closed.”

In the broader residential market, a report from Cushman & Wakefield show the total number of home sales in Hong Kong slowed in the second quarter, declining by an estimated 32 percent year-on-year to 14,900 transactions.