Sky-high property prices are driving some Hong Kongers to turn to cheaper commercial or industrial property for home use.
But while loft living in converted commercial buildings is popular in cities such as New York, there’s a hitch in Hong Kong: It’s illegal. Zoning laws prohibit the conversion of commercial or industrial buildings to residential space.
As Hong Kong property again sets new highs, it’s getting harder to find any conventional yardstick to make sense of these stretched prices.
After a late summer spurt in transactions sent the Centa-City leading index to a new record, last Friday came reports of Hong Kong’s most-expensive-ever property sale. A luxury apartment in the Peak district sold for a staggering 470 million Hong Kong dollars ($61 million) or HK$75,806 per-square-foot, according to the Hong Kong Economic Journal.
Hong Kong was not a healthy place in the late 19th century. For decades after the British founded the colony in 1842, the Chinese settlement of Sheung Wan struggled with overcrowding and chronic disease.
Things were especially bad in Tai Ping Shan, a hillside enclave of tenement houses packed with coolies who worked as manual laborers. In 1881, the colonial government hired Oswald Chadwick, a British engineer, to conduct a survey of the district's homes. He was alarmed by what he found. In some buildings, 80 tenants crammed into a single flat. People shared space with chickens and pigs. Drains were built haphazardly, so they clogged and became septic, toxic sludge leaking into the surrounding soil.
Layoffs of highly paid bankers are causing cracks in Hong Kong’s luxury-apartment market, by some measures the world’s most expensive.
One of the city’s leading moving companies, Crown Relocations, reports the number of people it’s moving into Hong Kong this year is down by about a quarter from a year ago, while the number it’s moving out is up by about a quarter. The folks moving out have needed lots of cargo space, which the company has interpreted as meaning they’re mid- and senior-level executives, a spokeswoman said.
Hong Kong will boost the supply of homes and give preference to local buyers as it seeks to cool housing prices that have surged to the world’s most expensive, fueled by record-low interest rates and Chinese investment.
Chief Executive Leung Chun-ying announced a 10-point package yesterday that included speeding up the approval of permits for private project sales, selling public units that were originally intended for rent, and drafting policies that will give preference to local buyers.