Luxury property market is booming in Hong Kong

Isaac Mostovicz writes that the luxury property market resurgence in Hong Kong could bring benefits across Asia and globally....

There’s an interesting report in The Wall Street Journal about the current state of the luxury property market in Hong Kong.

According to the report, the market is seeing a surge in sales, and the prices are high.

Demand for ultra-luxury property in Hong Kong has been growing strongly in the past few years, pushing prices in the segment to dizzying levels because of a scarcity of supply—particularly of townhouses and detached houses in urban areas—and the rising wealth of some buyers in mainland China looking for investment opportunities. Luxury-property prices in the city soared about 50% last year, compared to a nearly 30% rise in the market overall.

China’s presence in Asia as a leader in luxury has been a long time coming, and has been reported on in the mainstream media with increasing frequency.

In February it was reported that London’s luxury property market was experiencing an up-tick in sales. I blogged about it back then, but made no mention of foreign buyers because there was no evidence to suggest it.

This report, however, says that Chinese buyers are flocking to London to buy luxury properties.

Some of the mainland Chinese buyers who are thought to be driving up the price of luxury property in Hong Kong are also having an impact on high-end property further afield. China’s super-rich are particularly active in London, attracted by depressed property values and the decline in the value of sterling. Earlier this year, Hong Kong billionaire Joseph Lau, chairman of Chinese Estates Holdings, paid US$54 million for a six-story mansion in London’s Belgravia district that reportedly features its own cinema.

I did, however, blog about the recent trend of Chinese people heading west in search of luxury goods, a trend which appears to be continuing.

Do these developments constitute a “rebound” of the luxury market to previous levels? Hard to say. What we can be sure of is that the industry is recovering both globally and locally, and doing so quickly.

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