We live, as we’re constantly reminded, in a global economy, and nowhere is this more evident than in the property market. For those with substantial resources and a private jet or two, home ownership in London or New York is a foregone conclusion. On the other side of the world, however, things are not quite so clear cut. There, high-net-worth buyers are still dithering over a number of possible prime locations.
According to research carried out by international estate agent Knight Frank, Beijing and Shanghai are the cities whose billionaire populations are likely to grow most rapidly over the coming years – but, even so, it’s Hong Kong and Singapore, it feels, that’ll be battling it out for the title of Asia’s top city on the global stage. “Singapore, Hong Kong, Shanghai and even Beijing [are] all contenders,” declares the firm’s 2014 Wealth Report. However, Beijing and Shanghai “will remain essentially domestic centres. It will be for Singapore and Hong Kong to continue to act as Asia’s global entrepôts.”
At the moment, of course, few of those interested in allocating their spare cash to bricks and mortar in these tiger islands are seeing any significant signs of growth, since governments here have expended a good deal of energy throwing cold water on potential purchasing fervour. “Over the past three years, buyers in Hong Kong have had a very hard time,” says KS Koh, chief executive and founder of Landscope Christie’s International Real Estate in Hong Kong. “For non-residents, purchasing has become the most expensive in the world.”
Indeed, stamp-duty charges in Hong Kong can now rise as high as 23.5 per cent for these buyers, while those considering “flipping” within three years of purchase will also incur a hefty penalty. Similarly stringent “cooling” measures exist in Singapore, where less than 20 per cent of domestic properties are available to overseas buyers. This has meant the appetite for investment has fallen to diet levels. In 2013-14, according to the Knight Frank Global House Price Index, prices in the sovereign state fell by over 3 per cent, while Hong Kong saw only a modest rise of 6.3 per cent.
“What we’re seeing is an engineered, rather than a cyclical, slowdown,” says Nicholas Holt, its Asia Pacific head of research. “Other markets can afford to be more laissez faire, but both islands suffer from land constraints and neither government wants its property market to get out of control.” For many, however, these measures represent the slimmest of fingers in the dam restraining demand, and both local and international purchasers have been left frustrated and irritable. “Buyers are just sitting on the sidelines waiting for the tax to drop.”
For those involved in Asia’s future, the positives of each city seem self-evident. Both offer political stability, a legal system that is open and trustworthy, a high level of personal safety and, of course, some of the best conditions to conduct international trade anywhere in the world. “Hong Kong is the key financial centre of greater China,” says Holt. “As such, it holds enormous appeal for an increasing number of wealthy buyers not only from mainland China, but also from the UK, Australia, Japan, Russia and America.” Singapore is equally sought after, though its fanbase perhaps lies with a slightly different crowd, attracting purchasers from countries with a largely youthful population, such as Malaysia, Indonesia and India, as well as mainland China.
In both cities, where you buy is, of course, as important as what. High-end buyers in Hong Kong continue to focus on the traditional heartlands of Mid-Levels, with its tightly packed concrete web of high-rise, the pleasant greenery of Southside and the sought-after heights of The Peak, where views and prices continue to take the breath away. New infrastructure, however, is introducing interesting possibilities elsewhere. “The forthcoming third runway at Hong Kong Airport and Hong Kong-Zhuhai-Macau Bridge are bringing another market into focus,” says Alan Man, director and head of the sales division at Hong Kong Sotheby’s International Realty. West Kowloon, too, once an anonymous hinterland, is now home to big banks, in whose wake the area has seen an influx of well-heeled buyers. In Singapore, meanwhile, prime locations are District 9 (Cairnhill, Orchard, River Valley), District 10 (Farrer Road, Bukit Timah) and District 11 (Newton and Novena).
Hong Kong ranks alongside London and Monaco as the world’s most expensive place to purchase a home and, unsurprisingly, those buying at the pinnacle of the market are looking for something suitably luxurious. Priorities include fresh-off-the-building-site properties, harbour views and scale, which, on this cramped island, takes on an entirely different dimension. “One of the key factors you have to consider here is there’s so little space,” says interior designer Tara Bernerd. “You have to be on top of your game as far as layout is concerned.” This is a challenge she’s taken up with enthusiasm in many projects; in one of her most recent – the penthouse at The Westminster Terrace for Grosvenor Asia – clever planning has enabled her to squeeze in unexpected extras, such as a walk-in wardrobe and a wine cellar.
Many buyers here are happy to make do with the petite and perfectly formed, and young executives and families, breaking the traditional mould and moving away from extended family homes, are putting acute pressure on the supply of small apartments ranging from 500 to 700sq ft. The wealthiest, of course, can afford to command something more substantial, and their requirements are being met by developers such as Wheelock Properties, which will launch Mount Nicholson on The Peak in the next few months. Here, 48 apartments and 19 houses (with an unconfirmed starting price of about HK$600m, about £50.4m) will enjoy measurements more commonplace in locations with land to spare. “We’re aiming at the top 2 per cent of ultra-high-net-worth buyers in Asia and around the world,” says Cello Chan, assistant general manager. “Brand-new products on The Peak are very rare, but what’s even rarer is to find houses between 6,000 and 10,000sq ft and lateral apartments that average 2,000 to 3,000sq ft.”
While size here is obviously crucial, another recently imported fashion is the use of big-name architects to design top-of-the-range residential property. There are few bigger names than starchitect Frank Gehry (whose recently completed public works include the Fondation Louis Vuitton in Paris), and his design for Swire Properties’ Opus (apartments from about £32.34m), a 12-storey twisting tower of deluxe living on The Peak, has become the One Hyde Park of Hong Kong.
“Period” in Hong Kong means over 50 years old or so, and, while many local buyers believe new is nicest, clearly not everyone can own a home where the concrete has scarcely dried. Well thought out and recently renovated can also provide cutting-edge luxury, and an imaginatively reworked two‑bed flat in Mid-Levels Central’s Century Tower (about £4.7m through Landscope Christie’s International Real Estate) offers streamlined contemporary interiors and a balcony view.
Local living requirements have traditionally favoured the maximum number of bedrooms for the minimum square footage, but the worldwide demand for less-is-more is also increasingly appreciated. “In an apartment I completed recently, I asked, ‘Do we really need five bedrooms?’” says Bernerd. “Instead, we took out two of them and created a ‘wow’ master-bedroom suite.”
Magazine-smart kitchens and bathrooms are also coveted. “Following the trend in western countries, buyers want state-of-the-art kitchens and bathrooms that are bigger and bigger,” says Landscope Christie’s Koh. A duplex apartment (about £10.07m through Hong Kong Sotheby’s International Realty) in Park Towers, in North Point, with three en-suites and thoroughly of-the-moment cooking facilities comfortably satisfies these essentials.
One change that has met with less enthusiasm is the open-plan kitchen-diner. “In Hong Kong, owners will often have a number of people working in their homes and generally want a separate space for dining,” says Bernerd. They will, of course, also require somewhere to accommodate resident staff, and both needs are amply met at Consort Garden in Pokfulam, where a six-bed apartment (about £5.03m through Landscope Christie’s International Real Estate) has a separate dining room) and two additional maid’s rooms.
At-home entertaining, however, is not necessarily a priority, especially in Hong Kong, and buyers place a high value on communal facilities for welcoming guests. “A communal clubhouse is more spacious and you can hire a professional caterer,” says Koh. “It’s definitely become a trend.” The flats (from S$1.68m, about £800,000, through Knight Frank) in Marina One Residences in Singapore’s Marina Bay Financial Centre have access to both their own clubhouse and gym.
Internal space is not the only commodity in short supply, and the right to drive is not always accompanied by the right to park. In Hong Kong, new-built apartment blocks will often allow for only one car per property, which can be a stressful point of negotiation. A detached six-bedroom family house in Island South (about £24.32m through Knight Frank), however, presents no problems for this particular concern. With a private pool and garden, it’s also accompanied by a car port for four cars.
Getting away from the crowd is another real scarcity. “In Hong Kong, privacy is a super-luxury,” says Wheelock Properties’ Chan. The firm’s Mount Nicholson will, of course, be providing perfect seclusion in a gated development down a road with no other inhabitants – but, in addition, residents will enjoy something shared by only one per cent of locals: a house of their own.
If home alone is a must-have, then Singapore comes out a clear winner. Here, a “Good Class Bungalow” (GCB) – a bungalow here being a standard term for a detached house – is a sought-after, but not uncommon, feature of the property landscape. “A Good Class Bungalow inside its own gates, with its own pool, in District 10 is considered very desirable,” says Knight Frank’s Holt. This five-bedroom, architect-designed example (about £16.7m through Savills) in Holland Park undoubtedly fulfils the brief.
Whether you’re a happy apartment dweller or someone who insists on their own garden gate, the essential question remains: which city is likely to come out ahead in this property rivalry? “The key difference between Hong Kong and Singapore is the supply,” says Simon Smith, head of Asia Pacific research at Savills Hong Kong. “In Singapore there is a healthier equilibrium. In Hong Kong, there’s simply a chronic shortage of property.” A shortage that few doubt will continue to underpin prices.
“There is a fundamental difference between the two locations,” says Koh. “The Singapore government has always been reluctant to encourage overseas investment, while Hong Kong is quite open to that. I have a strong belief in the future of Hong Kong.”