Worth a gamble
Property prices in Happy Valley have been racing ahead for three years or more, but will they continue to jump higher? Jane Drew talks to Sam Ng, assistant manager, Chun Mou Estate Agency Company
Property prices in Happy Valley have been going from strength to strength in recent years. Consider that from 2004 to 2007, the price of luxury low-rise units (for instance on Broom Road) rose 80 percent, the price of units near the racecourse (for instance on Wong Nai Chung Road) 50 percent, and the price of 30-year old basic units (for instance on Village Road) an incredible 100 percent.
This surge has continued into 2008. “In the last six months alone,” according to Sam Ng, assistant manager, Chun Mou Estate Agency Company. “Happy Valley sales prices have been going up at an average of 20 percent to 30 percent across the board, while rents have increased between 30 percent and 40 percent.”
Whether these price increases are sustainable remains to be seen, but one thing is certain: Happy Valley, one of Hong Kong’s oldest luxury residential districts, is losing none of its appeal. Proximity to the racecourse is of course the main draw for homeowners and tenants alike – and it’s a bonus if your apartment looks over the track.
Importantly too Happy Valley retains its sleepy exclusive feel; it’s a low-density neighbourhood particularly popular with families. “There’s a great recreational centre,” points out Ng, “and New Crescent Garden opposite Fortuna Court is a pleasant park. Happy Valley also has a good school network.”
The tranquil village feel not withstanding, Happy Valley also enjoys a mass appeal since it has its fair share of lively restaurants and bars, and is in walking distance of bustling Causeway Bay. There’s a good transportation network in place, and an MTR link may be in the offing – but don’t hold your breath.
“Of the proposals put to the government, the most feasible was to put the concourse under the racetrack,” says Ng, “with exits at Fung Fai Terrace and on the junction of Wong Nai Chung Road and Sing Woo Road. But this has yet to be confirmed.”
What Ng doesn’t say is that even though the Hong Kong Jockey Club has agreed to cover half of the construction costs, there is no sweetener (land on which to build) to encourage the MTR Corporation to provide a Happy Valley link. In the meantime, of course, residents simply hop on a mini-bus to either Causeway Bay or North Point MTR stations.
It’s interesting to note that Happy Valley residents come from just about every walk of life. The range of apartments is such that the area is a valid option for most budgets.
“At the lower end of the market,” Ng points out, “you can pick up an apartment in Happy Valley for around HK$2 million.” A 338-square-foot unit in Mannie Garden, Tsun Yuen Street is currently on the market for HK$1.95 million; while the asking price for a 401-square-foot flat on a high floor in King Kwong Mansion, King Kwong Street is HK$2.7 million.
Flats of this type are rare, and of the various properties that exchange hands in the area, about 70 percent are located in high-rise buildings built 30-or-so years ago. At this end of the market, selling price largely depends on the state of the interior. “A basic 800-square-foot apartment on Village Road would fetch between HK$7 million and HK$7.8 million, post-renovation you could add at least 20 percent,” says Ng.
Of course if you’re looking for a blow-the-budget prestige property, the place to be is Upper Happy Valley, in the vicinity of Blue Pool Road, Broom Road and Briar Avenue. “The area appeals since it is quiet and exclusive with hillside and racecourse views,” says Ng. “Residents also appreciate being close to the Hong Kong Jockey Club.”
In Upper Happy Valley unit sizes average at 2,000 square feet but range from 1,500 square feet to 4,000 square feet. These spacious, well laid out properties tend to have high ceilings and balconies. “You can pay HK$40 million for a detached house in a low-rise block,” says Ng. “A 1,450-square-foot flat on Blue Pool Road is currently on the market for HK$12.5 million.
“A 40-year-old apartment of this type currently leases for around HK$72,000 per month,” Ng continues, “offering a 3.8 percent yield.”
Happy Valley is also home to a limited number of newer luxury buildings, where facilities come on tap. The majority are low rise, notably two-storey Villa Rocha and four-storey Villa Lotto. At 120 metres above sea level, Fortuna Court, built before the latest round of government height restrictions, is likely to be the last high-rise residence in Happy Valley.
“For a larger unit in one of the newer developments of around 1,116 square foot, you’d be looking at paying HK$12.5 million,” says Ng. “The rental would be around HK$45,000 per month.”
At these prices, it’s no surprise that many Happy Valley tenants are being forced out of the neighbourhood, notably to Wanchai and Tai Hang. But according to Ng, they may not be rent refugees for long.
“I’m hoping, no expecting property prices to go down,” says Ng, “though I don’t want to put a timeframe on it. Current prices are not sustainable.”
That said, for potential buyers, Ng believes Happy Valley remains a good long-term bet. “You have to remember that prices in Happy Valley went down less than average in 1997,” he says; “prices are not as volatile as they are elsewhere. Added to which, you can be confident of capturing good tenants with high end income.”
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