Sales of villas, bungalows and luxury homes in Hong Kong soared to a three-year high in the first six months of this year, as an influx of wealthy immigrants fuelled the hunt for bargains on the top end of one of Asia’s priciest residential property markets.

There were 286 registered transactions of villas in the first half, a jump of 23.3 per cent from the same period last year, according to data provided by Centaline Property, one of the largest real estate agencies in the city.

The sales value of the property fell 15.3 per cent to HK$12.34 billion over the same period, due to a “significant decline” in the sales of primary homes valued at more than HK$500 million, the data showed.

The rising volume reflected the “improved sentiment in both the property and stock markets”, and was supported by the start of an interest rate reduction cycle and the city government’s relaxation of investment immigration rules, said Centaline’s senior associate director Yeung Ming-yee.

Homebuyers and investors are “actively entering the premium luxury housing market, stimulating capital inflows and driving a recovery,” she added.

“Developers delayed the launch of new luxury projects over the past three years, leading to insufficient supply that kept primary-market transactions at a relatively low level of around 30 deals,” said Yeung. She added that the primary market’s total transaction value of HK$4.4 billion was 48.1 per cent lower compared to the same period last year.

Lived-in luxury homes sold well, with the volume rising 27.2 per cent to 257 deals during the first half, while the transaction value increased 30 per cent to HK$7.9 billion.

The bullish outlook is likely to continue into the second half of the year, with the full-year sales forecast rising to a four-year-high of 500 deals, as Hong Kong’s stock market boom attracts more companies to seek initial public listings (IPOs), while the government’s aggressive talent scheme draws more senior executives to relocate to the city.

“It is anticipated that transactions for new primary residential properties valued over HK$50 million on Hong Kong Island could challenge the 100-unit mark in the second half of the year,” said Jimmy Lee, director for Hong Kong Island at Midland Realty, another large real estate agency.

Luxury homes at The Peak and the Southside district of the island are likely to be favoured particularly by wealthy immigrants under the Capital Investment Entrant Scheme and its cash-for-residency initiative, which had received more than 1,500 applications as of June, Lee said.

The measure has so far netted more than HK$46 billion in investments to Hong Kong, he added.

With US$13.5 billion in funds raised via IPOs in the first half, the Hong Kong stock exchange ranked first globally in terms of maiden share sale activities.

This would only augur well for Hong Kong’s luxury property segment, said Victoria Allan, founder and managing director at Habitat Property, a boutique property agency that focuses on the upscale homes market.

“There is a real demand for luxury houses and we see that increasing,” she said. “The ⁠pickup in activity in the luxury transaction volumes gives buyers confidence that the market prices will go up this year.” - SOUTH CHINA MORNING POST