Luxury houses in the New Territories are highly sought after with health concerns pushing end users to look for residences in lower density areas with more outdoor space.

• Luxury sentiment revived in particular in the HK$50-HK$200 million segment where most units off ering discounts of around 5% changed hands with 131 transactions registered, a 19% increase from Q1. The super-luxury segment also saw volumes rebound over the quarter with transactions more focused on primary projects.
• Luxury houses in the New Territories were highly sought after with health and lifestyle concerns pushing some end users to look for residences in lower density areas with more outdoor space, and as such luxury prices in the New Territories recorded a surprise rebound of 2.1% where other subsectors recorded discounts of 1% to 3% from the previous quarter.
  
  
• With residential prices down by around 10% from their previous peak most vendors still have holding power, which has been reflected in the extremely low delinquency ratios over the past 12 months.
• Of the new super luxury projects which have been completed but not yet launched over the past two years due to uncertain market conditions, many are in prime locations with unique product features and have been developed by well-known developers. We expect the eventual marketing of these projects, together with other potential new launches, to attract interest from UHNWIs.
• Looking ahead, ongoing border restrictions and social distancing measures may aff ect the ability of both Mainland and local wealthies to identify and view trophy assets, while the recurring virus outbreak as well as and the political situation may push more luxury buyers to consider reallocating some of their real estate investments overseas, with 2H/2020 luxury volumes likely to fall back to previous lows.