Mui Wo property prices are set to rise sharply, a senior Hong Kong real estate figure predicts.
Kam Hung-yu, a Hong Kong managing director at global estate giant CBRE and a former president of of the Hong Kong Institute of Surveyors, predicts a major hike in residential valuations.
Writing in the Economic Journal he says the Housing Authority will start selling its new Mui Wo apartments in August. Mui Wo prices currently are at around $7000-$8000 psf, but after subsidies this will fall to as low as HK$5000.
“Some Hong Kong people believe the location is not attractive because it is too far [from the city],” he wrote. But he says citizens who qualify for the HA ‘green form’ subsidy should genuinely consider it. “This most likely is a housing market with very strong potential to rise in value,” he wrote.
But far more important than the new public housing will be the economic activity as a result of the development on north Lantau and the government’s economic plans, Kam says. With the building of the Hong Kong-Zhuhai-Macau Bridge and the Tuen Mun link, the government has identified north Lantau as a logistics, retail and commercial zone. South Lantau has been nominated as a conservation and tourism zone – at least until the arrival of the East Lantau Metropolis in the 2030s.
“Under such a plan, Lantau property prices will certainly rise. Moreover, because the base price is fairly low (the southern side is roughly one-third of the city), I predict that the rise will be quite large.”
While Kam is merely reflecting the government view on the bridge’s economic impact, he is notable as one of the first – and certainly not the last – to identify the real estate opportunity. By boosting expectations of higher prices he is of course himself helping to fulfil those expectations.
“Mui Wo is one of the first to receive the benefit of Lantau development. Buying in Mui Wo right now is not a bad choice,” he concluded.
A global survey last month ranked Hong Kong as world’s most unaffordable housing market for the sixth successive year. Median home prices are now 19 times annual gross income – the highest ever recorded in the annual survey, which classifies any level above 5.1 as “severely unaffordable.”