Price gap between rural and urban properties narrows

Developers have been turning to farmland conversions.

Improving infrastructure have moved to close the price gap between urban and rural areas as Hong Kong developers turn to converting farmland for residential development instead of competitive bidding, according to a news release from Colliers International.

This comes as a result of non-local developers taking up 96% of total residential site transactions in terms of land value which were sold at higher-than-expected prices.

“Land premium of farmland conversions, a 24-26% discount to the latest market accommodation value in the same district, has become a more attractive alternative to competitive bidding,” said Vincent Chung of Colliers.

On the residential leasing side, sustained demand for luxury residential properties have been on the rise towards the end of 2017 with little to no vacancy offerings.

This has been brought about as multi-national corporations have started to hire more Asian expats.

“Given Asian’s emphasis on education, we expect properties within catchment area of new international schools in decentralised districts will become more popular,” Letizia G. Casalino, Senior Director of Colliers said.