Park Island property prices are poised for a new surge
Property agents around Park Island are reporting strong buying demand for Park Island properties as primarily Hong Kong investors appear to see significant gains ahead for Park Island property as a result of end-user demand. Some agents are forecasting a price of $10,000 psf for regular apartments to be reached by early 2014. I think this is possible but more likely by the end of 2014 or early 2015.
Below is the most recent price graph for Park Island, just out today, which seems to confirm this trend.
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| Park Island Price Graph |
The themes and the factors driving the continued rises are nothing new. Park Island is great value, excellent quality, and still very affordable compared to almost all other parts of Hong Kong. Borrowing costs are very affordable (and seem poised to remain so for some time yet), and Hong Kong residents are increasingly realizing that they need to preserve the value of their declining currency (pegged to the US dollar) by buying property or other hard assets. Tenants are seeing rentals rise as leases come up for renewal (thus increasing rental yields for landlords), but this is not unique to Park Island, and indeed this is a trend across all parts of Hong Kong (and indeed all parts of Asia for that matter).
There has been recent speculation about eventual car access to Park Island for residents (right now only taxi access and public transport is allowed, with exceptions for residents only granted in exceptional or "one-off" circumstances, such as weddings, business needs, moving in/out furniture, physical disability, etc).
If such car access is granted, prices could easily double from current levels, so there is, clearly, a lot riding on the outcome of this matter for current owners. My feeling is that car access will eventually come, but not necessarily right away. So anyone buying with this hope should plan on holding long term for the BIG payoff, and in the meantime enjoy the lifestyle benefits that Park Island has to offer.
If they do build a car park under the bridge:
ReplyDelete1) How many spaces do you think there would be?
2) How much do you think a space would cost if you were to buy one?
I have absolutely no idea but I would guess (out of nowhere) about 200 spaces. each sold for something between $450K and $800K
Thoughts?
I'm still trying to find out more information on what is actually planned and what is feasible.
DeleteThe latest I have heard from authorities is that if/when it is built it will likely not be just a carpark on its own. Rather, as the land currently zoned for a public recreational area, it would likely be a "mixed use" structure, for example an indoor ice-skating rink, with a level or 2 of carparking, perhaps also with movie theaters, shopping, dining etc, not to mention cater for people coming to enjoy our nice new extended beach when that is finished. If that proceeds, it would be a second issue as to whether parking is specifically allocated or sold to Park Island residents. Another model they might adopt is just to allow short-term and long term rental of carparks there rather than selling them. If they were rented by guess would be perhaps $3000 a month. If they sold them yes, I think in the range you have mentioned would be likely.
When will this happen?
DeleteHow to speed this up?
DeleteI would say prices on Park Island will on average rise 8 or 10 percent for the next decade. There will be ups and downs along the way but anyone who buys now will be looking back at what were bargin prices at these current levels.
ReplyDeleteAllowing car access would give a huge boost to prices while environmentally the impact would be insignificant. The traffic volume on the Tsing Ma bridge is probably more relevant.
ReplyDeleteAs for price trends, PI tracks overall market although the lag factor has narrowed in the past year. In the past year, prices rose by 25% which is bit higher than HK generally. The benefit of investing in PI is that while enjoying the ride in prices, you also get to live in a very pleasant living environment as PI Blogger said. A short article in the SCMP (Money Post) today gave two good opposing views about house price trend in HK. The bullish argument wins for now - due to the fact that there is very little alternative to park spare cash and supply remains very tight. There is a group of residents who has formed a lobby group to allow car access. It is a positive move for Park Island.