The eye-catching sale of 37 Shouson Hill Road for HK$2.5 billion to Hang Lung Properties suggests that there is still life in the super luxury sector.

• The sale of 37 Shouson Hill Road for HK$2.5 billion to Hang Lung Properties for redevelopment, together with two other developable sites changing hands, reflected increasing interest in super luxury redevelopment either for investment or owner-occupation.
• Luxury volumes have been volatile over the past few months with July’s buoyant mood quickly dissipating due to a third virus wave and heightened social tensions.  Nevertheless, luxury prices on Hong Kong Island and in Kowloon declined marginally by 0.1% and 0.5% respectively in Q3 with only a handful of distressed assets changing hands.
• The New Territories market continued to revive with more buyers treasuring the low development density and ample outdoor space on offer, with houses proving particularly popular, at prices one-fifth Peak and Southside levels.
• The mass market was in a buoyant mood with reviving interest in the secondary market due to lower down payment requirements.  The primary market saw far fewer transactions as developers held back project launches due to the uncertain environment, while some were more focused on clearing backlog units with more aggressive incentives.
• Looking ahead, the full impact of COVID-19 may surface towards the end of 2020 if government decides to taper subsidies and more corporate layoffs push unemployment rates to new highs.  With local economic prospects far from certain, and further stock market volatility likely, residential volumes and prices may face a bumpy ride to year end.