As swish and prestigious as addresses in Repulse Bay, parts of Mid-Levels and on Kadoorie Hill can be, nothing quite comes close to the level of exclusivity and boggling affluence as the Peak. The name says it all. Easily Hong Kong’s toniest address, what makes the Peak so in-demand are the first and second rules of real estate ruling the day: location, location, location and the principles of supply and demand.
The Peak derives a great deal of its status from its location, literally lording over Hong Kong from the cities highest vantage point, and from its history as a colonial enclave with limited space and even more limited people. The people part has changed but the finite developable land on the Peak has not. Located in the heart of Central and Western district, one of the least populated parts of the SAR has and its second highest average income. Take the Peak as its own mini-district and population drops to lowest and income to highest.
The Peak is the natural extension of the central business district and roughly the same distance — and as equally accessible — from Central and Admiralty. Other Peak perks include stellar transit links (it’s one of the city’s premier tourist destinations) despite the lack of an MTR station, relative quiet and ultra-exclusivity. Because the district officially extends to Kennedy Town, it includes some of Hong Kong’s best schools, among them King’s College, St Joseph’s College, St Stephen’s College, German Swiss, Singapore and Hong Kong International Schools, Island School and West Island School.
If things go as planned, Central and the Peak will have a beautified waterfront and a repurposed and revitalised Western Wholesale Food Market (the plan is to convert the piers to open public space) courtesy of the 2013 announcement of the $100 million Signature Project Scheme. The impact of this urban renewal won’t be felt on the Peak per se, but it will contribute to Central’s continuing status as the heart of Hong Kong and the most desirable place to live.
When new developments are announced in spots like Whampoa or Tseung Kwan O, it’s usually multi-storey, often mixed-used tower with a couple of hundred flats. If a developer is lucky enough to get a large plot of land, two or three towers can sometimes be squeezed in. That applies to both mass market and luxury projects. But that tendency for crowding gets brushed aside when it comes to the Peak.
Prices on the Peak, like prices in most luxury districts across the globe, do not really feel the sting of fickle markets and economic instability. Properties like the ones on the Peak are also rarely influenced by policy decisions, like the Hong Kong government’s aggressive cooling policies. An extra few million dollars in stamp duties does little to dissuade buyers of homes with nine-figure price tags. In November 2013, Hutchison Whampoa announced it had sold two units in its forthcoming Barker Road development, a collection of fewer than 10 townhouses, one for a near record $740 million. Rents on the Peak normally start at around $100,000 per month.
Second to None
Prices on the Peak have been rising steadily since 2008, despite the GFC, on the back of wealthy Mainland buyers and according to the Wall Street Journal it’s prompting some owners to start selling. Swire, which opened the Frank Gehry-designed tower in 2012 for leasing only, put a flat on the market last December for $60 million. Knight Frank named Pollock’s Path the most expensive residential neighbourhood in the world in 2013 and according to their recently released Global Cities report, Hong Kong’s status is only going to rise, keeping it high on the list of prime investment markets and an elite business and talent magnet for just the kind of buyers that purchase on the Peak. Nonetheless, early-2014 predictions by Knight Frank, Colliers International and Jones Lang LaSalle all included price drops of up to 10 percent in the luxury sector; transaction volumes of homes over $100 million are down significantly. Whether the Peak can weather the storm remains to be seen.