The Asian Luxury Property Market saw record prices in many areas in 2007. Luxury property developers took advantage of the flourishing market and in some cases adapted existing plans to increase floor area and the level of appointments to attract a wealthier clientele.

Hong Kong Luxury Residential Real Estate

Hong Kong set a new record with the sale of Branksome Crest’s  three thousand square foot penthouse duplex apartment for more than $20 million – over $4,000 per square foot.

Pundits suggest that the record will not last long and is likely to be broken once again in 2008. CB Richard Ellis mentioned in their 2007 report that high-end luxury residential properties were widely sought after by both investors and end-users. There is a scarcity of luxury homes in Hong Kong, which boosted the cost of sites with luxury re-development potential and a house plot in Village Road fetched almost $2,000 per square foot. Overall, luxury residential real estate saw an increase in value of 14.1% for the year 2007, and prime luxury residential real estate outperformed all other property sectors by a substantial margin. Another record broken was a luxury villa in Severn 8 which sold for over $7,000 per square foot.

Alan Man, senior director of CBRE said, “We believe that Hong Kong’s robust economic fundamentals and favorable market considerations, including high land values, shortage of new supply and strong end-user as well as investor demand, will combine to sustain the rosy performance of luxury property prices achieved over the last 12 months. Although we see a stronger participation from overseas and Mainland players, both local users and investors will continue play a key role in the market. We expect prices of luxury residential properties, particularly those of premium grade premises, to appreciate further in 2008 by 20%-25% considering their rarity. Given the limited leasing options and the inflationary environment, luxury residential rents are expected to continue to rise, further compressing yields to around 3% over the near-term.

China Luxury Real Estate

Shanghai Luxury Real Estate

Shanghai saw a drop in transactions in the last quarter of 2007, but a 34% rise in prices year on year overall. The slowing of the market was largely due to an increase in available units, although the Tomson group’s launch of the Tomson Riviera Garden was extremely successfull, selling 94% in the month of release, at an average price of more than $4,000 per square meter. Once again, the luxury serviced apartment sector performed well. Several luxurious serviced residences were also launched around the same time, bringing over 300 more units on the market. 

• Citadenes Shanghai Biyun (English)
• Citadenes Shanghai Biyun (Chinese)
• Tomson Riviera Garden (English)
• Tomson Riviera Garden (Chinese)

Guangzhou Luxury Real Estate

Despite a substantial increase in supply and a levelling off in demand, Guangzhou luxury residential property values increased dramatically during 2007, although less so in the last quarter. Luxury villas saw the largest increase in capital value 2007 Q4 with an increase of 2.1%, although some 4,000 new units were added in the last quarter, causing the market to slow.

Singapore Luxury Residential Property Market

Singapore, like many luxury property markets, saw record prices. SC Developments, The Marq on Paterson Hill, for instance, sold out within hours of release – the most expensive unit selling for $31 million. The price of more than $5,000 per square foot set the new record. According to Merrill Lynch, the number of millionaires living in Singapore rose by 21% in 2007. Developers all over Singapore are tearing down older buildings to redevelop into luxury condominiums in the hope of repeating The Marq’s success.

Residential land with luxury real estate development potential set several new price records. Westwood apartments sold for $2,525 per square foot per plot. Luxury and super-luxury leased condominiums saw a massive 29% increase in costs in 2007, slowing only in the last quarter.

SC Global Developments

The Marq

Kuala Lumpur Luxury Property

Kuala Lumpur’s skyline will be completely redefined soon. The number of luxury developments currently under construction is quite staggering. OneKL and The Troika should be complete by 2009. OneKL set new standards in prices for luxurious accommodation when it was launched, but The Troika surpassed even that - 70% sold out already. Four of the eight penthouses were sold to foreign buyers. The 4 level, 21,000 square foot “Luxurious Penthouse,” reportedly sold for $18 million – a new record for KL. Foster & Partners, world renowned British architects, designed the building with GDP Architects.
More luxury developments in Kuala Lumpur include the DKBL Tower, The Capers, K Residence and The Four Seasons, all of which reached record prices in their release.

The KL luxury market is as strong as ever, once again pulling in foreign investment and the luxury serviced condominiums, such as The Marc Residence, showing the biggest gains in 2007.

CBRE Hong Kong Luxury Residential Market View 2007 Q4 (PDF Download)

CBRE China Market View Q4 (PDF Download)