How do Hong Kong property prices compare to other global cities?

 —  Article by JLL Staff Reporter

Hong Kong’s residential property market is renowned for being one of the most expensive in the world.

Homebuyers and investors need to have substantial sums in the bank to afford many of the apartments currently on the market. For HKD 10-12 million (USD 1.28 – 1.54 million) today’s apartment-hunters could get a new, 500 sq ft, 2-bedroom apartment in Kai Tak or Tsuen Wan, or a 700 sq ft, 3-bedroom apartment in an older building in Sai Wan Ho. The facilities at Hong Kong’s newer buildings include a clubhouse, gym and outdoor pool. The city’s older buildings will have fewer facilities but perhaps more spacious layouts and higher ceilings.

Ingrid Cheh, Associate Director, Hong Kong Research, says: “With a budget of HKD 10-12 million, you would only be able to buy a basic, mass residential unit with a maximum of two bedrooms in a fringe central location in Hong Kong. Yet this is what less than half of the households in Hong Kong can afford. With prices now at record high levels, developers are resorting to building increasingly small units to keep lump sums affordable.”

In contrast, the same budget (USD1.28 – 1.54 million) goes significantly further in some of the other big global cities – even those where luxury apartments come with sizeable price tags such as London, New York and Tokyo.

So how do the hottest property markets overseas measure up to Hong Kong’s in terms of price range, size and facilities? View the slideshow to find out:

London

The UK’s capital city has traditionally been a top choice for Hong Kong investors and, in recent years, mainland Chinese, who are on the look-out for overseas opportunities to diversify their property portfolios. Central London boroughs like Westminster and The City of London are the most popular, thanks to their iconic London views, numerous Zone 1 transport connections, and proximity to some of the world’s best theatres and restaurants. A luxury 1-bedroom, 600 sqft apartment with a Juliette balcony in these areas will cost around £1 million (HKD 10.2 million). Facilities in new builds include concierge service, a clubhouse with cinema room and gym, and residents’ lounge.
Head a little further east in Zone 2 and the same budget will go further; £1 million (USD 1.31 million) will buy a 2-bedroom apartment of around 800 sqft in a luxury high-rise, complete with leisure facilities and easy access to parks and shopping facilities. 
Meanwhile, Canary Wharf, now London’s major business and financial district, is home to a cluster of luxury property developments, as well as wine bars, restaurants, and Canada Square Park, which hosts summer concerts and a winter ice-skating rink. “A 2-bedroom, 700 sqft luxury apartment on the waterfront with a balcony at the Canary Gateway is priced at £470,000 (USD 615,000),” says Mandy Wong, Head of International Residential Property Services at JLL Hong Kong. “That’s almost half the price of Hong Kong, or put another way, investors could buy two apartments for the price of a single one in Hong Kong.”
Manchester

Manchester has undergone a complete transformation over the past 10 to 15 years. It’s become the North of England’s entertainment and cultural hub, and many tech companies have relocated to this thriving metropolis. “Manchester apartments are of a similar size to those in London, but they are much less expensive. For the USD1.28 – 1.54 million budget(£ 980,000- £1.2 million) it’s possible to buy a penthouse near the city center,” says Anne-Marie Sage, Head of International Residential Property Services at JLL Asia. “Investors typically purchase flats priced between £200,000 and £400,000 (USD 262,000 - 524,000).”
New developments such as Manchester New Square are part of the revitalization of the city center with artisan restaurants and shops nearby. Here, a 1,000 sqft, 3-bedroom luxury apartment costs £466,500 (USD 611,000).
The city also offers more for smaller budgets than London. Around £200,000 buys a 700-1,000 sqft flat with 2-3 bedrooms in an older building, or a 500-600 sqft, 1-bedroom flat in a newer building. And it’s easy to rent investment properties in Manchester. “It takes an average of just nine days to find new tenants,” notes Wong.
Berlin

The German city of Berlin has undergone a huge revival in recent years, attracting throngs of young working professionals. That makes it a solid investment choice with potential for “sizable return on investment,” says Sage. The city bears all the hallmarks of a booming property market: the new Berlin Brandenburg international airport is likely to open in 2019 and many industries have moved to the city, especially the technology sector. It also has a flourishing entertainment and cultural scene. The Mitte, the historical heart of Berlin, is home to art galleries, museums, theatres, clubs, Humboldt University, the railway station, the Brandenburg gate, Berlin Cathedral, and The Reichstag.
In Berlin Mitte €600,000–700,000 (HKD 5.4 – 6.3 million) buys a 1,000 sqft, 3-bedroom apartment in a new luxury building, overlooking the River Spree. A penthouse with 3-4 bedrooms is still within budget, priced at €1.2 million (HKD 11 million). However, buyers typically invest much less, paying €400,000 (HKD 3.6 million) for new apartments with concierges and 24-hour security.
Luisenpark Berlin-Mitte is being developed as a new residential quarter between the city’s two most iconic squares, Alexanderplatz and Potsdamer Platz. Parkside House is close by. Scheduled for completion in 2019, a 1,000 sqft, 4-bedroom apartment in this luxury development costs €569,000 (HKD 5.2 million).

Tokyo

Tokyo has always been a popular choice for property investors in South East Asia. Interest is expected to pick up now that the city is hosting the 2020 Olympics, with investments anticipated to improve its infrastructure.
Since Japan’s asset price bubble burst in 1992, few luxury apartments have been built. So when luxury developments do come onto the market in prominent districts, such as Shibuya, Omotesando and Aoyama, they tend to be snapped up by investors from Hong Kong and elsewhere.
Property prices across Tokyo vary greatly. In Shibuya―a popular nightlife spot and trendy shopping district famous for its busy pedestrian crossing―a luxury 1-2 bed, 800 sq ft apartment with a balcony, close to the railway station, starts from HKD 10 million (USD 1.28). In Chuo-ku, historically the main commercial centre of Tokyo, a 3-bedroom, 900 sqft apartment within the luxury 14-storey Premist Nihonbashi Hamacho-Koen residential block is HKD 8 million (USD 1 million).
Facilities in new buildings generally include a concierge, well-decorated lobby, residents’ lounge, and Japanese Zen garden. New high-rise buildings, which have club house facilities, including a gym, are located in Tokyo Bay or Shinjuku where units start from HKD 3-4 million (USD 380,000 to 500,000).

New York

Prices vary greatly in New York, depending on whether the property is located in Upper, Lower or Midtown Manhattan. The HKD 10 million (USD1.28 – 1.54 million) budget could buy you an apartment in Lower Manhattan or Midtown. One-bedroom, 700 sq ft luxury apartments in buildings with concierge service and gyms sell for between USD 800,000 and USD 1.2 million.
At Extell’s One Manhattan Square, a condominium tower on the Lower East side of Manhattan, prices started at around USD 800,000 to USD 900,000, with units priced on average at USD 1.2 million.“The U.S. is more a more popular market for mainland Chinese buyers, than those from Hong Kong or Singapore,” observes Sage. “The main reason end-users buy properties in the U.S. is that their children are being educated there.”

Boston

Further up the U.S. East Coast, Boston has seen substantial levels of  regeneration in recent years. It is particularly attractive for investors seeking properties for their children to live in while studying at the city’s world-famous universities, such as Harvard and Massachusetts Institute of Technology (MIT).
One popular choice is Echelon Seaport, a large-scale condominium development located in the heart of Boston’s Seaport district comprising two 21-storey buildings offering 447 luxury condominiums. The development boasts three pools, a roof garden, health club and spa, fitness centre, and luxury retail shops and restaurants. A 700 sq ft, one-bedroom apartment is priced at USD 1.15 million.

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