Even with hordes of tourists swarming over it every day, The Peak is the, ahem, peak of Hong Kong living — more so than seaside Repulse Bay or Clear Water Bay, more so than the upper floors along Conduit Road. The go-to spot for special occasion dinners and weddings, as a residential neighbourhood it doesn’t get much more swanky, and there’s little in the future to change that.
According to June research by Knight Frank, Hong Kong ranks second within the top ten most expensive luxury home locations in the world, behind only Monaco. Premium luxury property costs over $42,000 per square foot in Monaco, $36,000 in Hong Kong and $34,000 in London — the only three cities cracking the $30,000 barrier. The vast majority of those properties are located on or around the Peak.
Typically, a great deal of the Peak’s prestige comes from an imbalance in supply and demand in a city that has supply issues across the board. “It has to do with the government’s land use policy. The Peak has always been earmarked as low-density partly because it’s in the middle of several country parks,” says KS Koh, Landscope Christie’s International Real Estate founder and chief executive. Additionally, “The roads are too narrow, heavy rain can be hazardous. In Hong Kong if the transport is too convenient the location is not regarded as high end and prestigious.”
The Peak regularly smashes the SAR’s per square foot highs, with properties in the area selling for over $400 million, roughly $110,000 per square foot (at Sun Hung Kai’s Twelve Peaks on Mount Kellett Road), and listing for a world record per square foot price of $175,000 (also in Twelve Peaks). A villa on Pollock’s Path sold for a then-record $800 million in 2011. A Barker Road villa by Hutchison Whampoa reported fetched $107,000 per square foot in 2013.
But there’s more to a luxury address than just eye-popping price tags. Christie’s whitepaper Luxury Defined noted conscious living, convenience, privacy (“The age of the smartphone and its pervasive social media feeds has brought with it an increasing desire for privacy,” the report said) and collectability (“Trophy real estate is the ultimate collectible treasure.”) were among the factors that influenced luxury purchases. Also crucial was the experiential factor. “Today’s new wealthy consumers are more informed, more globally exposed, and more sophisticated than previous generations,” stated Christie’s. “This shift toward experiential luxury is similarly reflected in the amenity and lifestyle preferences of HNW home buyers.” The Peak ticks off almost every box.
On the Horizon
Based on luxury buyer preferences, the Peak is the obvious choice to be the city’s prestige location. If you hadn’t noticed, Hong Kong is a high-rise market; over 99 percent of the residential stock is apartments in towers. And no matter the location, if a property is a house, it’s even more elite.
“The Peak is still regarded as the most enviable of Hong Kong stock. Any new building will come from existing developments. There’s no available land so there’s no reason its status will change,” theorises Koh. “It was created to be very exclusive. There are limited roads and access, there are no buses whizzing by at all hours. It is truly private and exclusive. In a high end market purchasers are not just interested in size and design.”
Which explains the anticipation surrounding Wheelock Properties’ upcoming Mount Nicholson Road development. The project by Wharf Group and Nan Fung has been hovering below the radar for some time, but what is confirmed is that the four apartment towers (a relatively low-rise 12 storeys, with one flat per floor) and 19 houses should be hot properties when they launch later this year. The Mount Nicholson project will be the only new development on The Peak for the foreseeable future.
“We will see more transactions of properties with prestige addresses this year as buyers have gradually accepted the new transaction costs,” Wheelock managing director Ricky Wong told the SCMP in January. When completed, Wong predicted the Mount Nicholson development “Will be the most valuable property on The Peak with asset value of more than $20 billion.”
Though luxury transactions dropped 15 percent in 2013 and then another 33 percent in 2014 in the wake of significant stamp duties, the lull eased up at the end of last year. “Wealthy mainland Chinese buyers are beginning to accept these taxes and are starting to trickle back into the market,” Koh stated in the report. The combination of elite address in one of the city’s last remaining enclaves, the area heritage — Wheelock’s Anecdotes from The Peak photography exhibit last year showcased the district’s social and natural history — limited supply and unique design by a clutch of international architects (including New York based Robert Stern, whose Repulse Bay house is currently under construction) will make the launch the property event of the year.