Shouson Hill Home Sells for $55M as Turbulence Challenges HK Luxury Market

A villa has sold for HK$435 million ($55.4 million) at No.15 Shouson in Hong Kong Island’s Deep Water Bay, showing resilience in demand for high-end homes as higher interest rates threaten to tamp down luxury market sentiment.

House 11 in the development of 15 detached homes sold for HK$92,044 ($11,762) per square foot of saleable area on Monday to an unnamed buyer, with the Shouson Hill project continuing to generate “overwhelming responses from the market”, No.15 Shouson said in a release.

The sale is the second in less than a month at the joint development of Emperor International Holdings, CC Land Holdings, Mingfa Group and CSI Properties Ltd, following a June deal for the larger House 7 at a price of HK$108,346 per square foot of area.

The back-to-back transactions reflect “the advantages and value of the golden location” in the southern part of Hong Kong Island, Emperor vice chairman Alex Yeung said.

Exclusive Surroundings

House 11 measures 4,726 square feet (439 square metres) in area and comprises four en-suites, a private outdoor area with a 1,857 square foot garden, a 1,121 square foot rooftop and 396 square feet of parking space. The luxury villa also features a private swimming pool and an in-home elevator.

Located in Hong Kong’s exclusive Deep Water Bay neighbourhood, No.15 Shouson 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.

Each house at the development has a saleable area ranging from 3,727 to 12,073 square feet and a layout of four to six en-suites. House 7, a six-bedroom residence less than five minutes’ drive from Li’s mansion at 79 Deep Water Bay Road, spans 8,032 square feet in area, while another unit put up for sale last month, the adjacent House 6, offers 9,550 square feet.

Nearby luxury properties such as SEA Holdings’ 1 Shouson Hill and Sun Hung Kai Properties’ Shouson Peak have seen selling prices for new homes of HK$90,000 to HK$101,000 per square foot over the last year, according to figures provided by Alex Leung, senior director at CHFT Advisory and Appraisal.

Rate-Hike Ripple Effect

A sharp rise in interest rates in the US means a rising cost of capital and a possible end to the negative real rate era in Hong Kong, putting pressure on luxury home prices, Savills said Monday.

Luxury prices declined in the second quarter across all districts, with townhouse prices falling by 4.1 percent from the first three months of the year, the property services firm said in its residential sales report. Luxury apartment prices on Hong Kong Island and in Kowloon and the New Territories slid by 2.9 percent, 2.7 percent and 2.5 percent respectively.

Two June deals showed how local demand stepped in as mainland buyers were stymied by COVID-19 lockdowns in major cities and the ongoing closure of the Hong Kong border.

In addition to No.15 Shouson’s House 7, which was reportedly bought by a local tycoon, a 7,986 square foot detached house on 6 Perkins Road in Jardine’s Lookout was said to have sold for HK$750 million to Michael Wu, chairman of Hong Kong restaurant group Maxim’s, according to local media.

“Though mainland buyers are still finding it difficult to cross the border, there is still local interest in super luxury homes,” said Simon Smith, regional head of research and consultancy for Asia Pacific at Savills.

At the same time, developers remain keen to acquire luxury sites to replenish their land banks, Smith said. After acquiring a South Bay Road site in Repulse Bay for HK$1.2 billion in February, SEA snapped up Loong Fung Terrace in Jardine’s Lookout for HK$627 million in June. Another luxury site, the 269 Queen’s Road East property in Wan Chai, was tendered by the government in June and sold to Swire Properties for HK$1.96 billion.