Mystery Buyer Of "Most Expensive Apartment In Asia" Revealed

A month ago, we highlighted a disturbing new record in the Hong Kong real-estate market – a market that received a ranking of “high” from Algebris Investment’s Alberto Gallo in his annual ranking of the world’s biggest asset bubbles.

According to a report in the South China Morning Post, the record price per square foot for a residence in Hong Kong was obliterated when a mystery buyer purchased two apartments in “The Peak” – an exclusive district.

At 132,000 Hong Kong dollars per square foot, the purchases made them the two most expensive apartments in Asia in terms of square footage. In total, the mystery buyer spent an astonishing 1.16 billion Hong Kong dollars (nearly $200 million) on the two apartments.

Today, the name of the mystery buyer has been revealed, courtesy of the South China Morning Post:

The Land Registry on Saturday identified the buyer as Lin Zhongmin, sparking frenzied media speculation about where the person comes from.

 

The two flats on the 12th floor of the exclusive residential development, with a combined area of 8,821 square feet, were sold last month.

 

One flat, measuring 4,242 square feet, fetched HK$560.2 million, or HK$132,060 per square foot, making it Asia’s most expensive residence by floor area. The adjoining flat, measuring 4,579 sq ft, sold for HK$604.2 million, or HK$132,059 per square foot.

According to the SCMP, the name of the buyer is not widely known in Hong Kong. The paper ventured to guess that he is from the main land, meaning the buyer would have to pay a double stamp duty of 15% on one flat plus the basic stamp duty of 4.25% on the other. The total would come to about $110 million Hong Kong dollars.

Whoever Lin is, it’s safe to assume he has a personal wealth in the billions.

“It would be logical to assume that anyone who can afford to spend more than HK$1 billion on two flats would have a personal wealth of at least HK$10 billion,” Vincent Cheung, deputy managing director for Asia valuation and advisory services at Colliers International, said.

"They may not even have bought the flats to live in as they most probably have other homes."

With the purchase of these two apartments, Mount Nicholson now has Asia’s three most expensive homes. In addition to the two bought by Lin, another flat – measuring 4,266 square feet - was sold in November for 500 million Hong Kong dollars ($60 million).

The buyer of that flat was mainland businessman Zhu Xingliang, the founder of Suzhou Gold Mantis Construction Decoration, which is engaged in the interior design, construction and landscaping sectors.

In the global league table, Hong Kong held on to the dubious accolade of being the world’s most expensive place to live for the seventh straight year in 2017, according to Oxford Economics. The median home price was 18.1 times the median annual pretax household income last year.
 

Hong Kong Property: Record Price Per Square Foot Smashed...Twice...By The Same Buyer

Two weeks ago, we discussed Algebris Investments’ analysis of the world’s biggest asset bubbles. Portfolio manager, Alberto Gallo, noted that “It’s not just about valuation, it’s about irrational behaviour” and used variety of measures to identify the latter including ”Sky is the limit”, “Bidding wars” and “The trend is your friend”. Gallo listed what in his opinion were the fourteen biggest bubbles across the globe which included Hong Kong property, obviously.

In the global league table, Hong Kong held on to the dubious accolade of being the world’s most expensive place to live for the seventh year in succession in 2017, as Forbes noted, quoting work by Oxford Economics.

Holding on to its rank as the most expensive housing market in the world for the seventh year in a row is Hong Kong.

 

The median home price was 18.1 times the median annual pretax household income last year, according to a recent annual report from Demographia. Though a small improvement from the year before when home prices were 19 median household income, Hong Kong still ranks as "severely unaffordable" the report said.

 

The city"s housing prices have skyrocketed in recent years, driven by low interest rates and mainland Chinese buyers. Lack of affordable housing has become a top social issue as the city"s poor crowd into "cage homes" and dangerous, subdivided apartments.

To cement its leadership position in the realm of obscene property valuation, the South China Morning Post (SCMP) notes that the record price per square foot for a residence in Hong Kong has just been smashed…twice…by the same buyer…for two apartments in exclusive “The Peak” district. 

Mount Nicholson, the luxury housing development atop Hong Kong’s highest elevation, has clinched the crown as the priciest address in the most expensive residential market on earth, selling two apartment units for HK$1.16 billion (US$149 million) to a single buyer.

A buyer paid HK$600 million, or HK$131,000 per square foot, for a property measuring 4,579 square feet at Mount Nicholson, according to Wheelock Properties, which oversees sales of the joint project between Wheelock & Co. and Nan Fung Development, without divulging the buyer’s identity.

The same buyer splurged another HK$560 million on the same day on a second flat measuring 4,242 sq ft, or about HK$132,000 per sq ft. In square footage terms, the second property is the most expensive residence in Asia.

“From the perspective of an ordinary Hong Kong resident, we’ll never understand why” the city’s wealthiest people pay such sums for homes, said Knight Frank’s head of valuation and consultancy Thomas Lam.

As the SCMP laments, Hong Kong’s new Chief Executive is facing a losing battle in providing affordable housing and containing the bubble.

The prices of Hong Kong’s private housing advanced in September for the 18th consecutive month to a record, underscoring the challenges facing Chief Executive Carrie Lam Cheng Yuet-ngor, as she puts housing front and centre as the most important policy priority in her four-month-old administration. In her maiden policy address to the city, she pledged to create a “Starter Home” scheme to increase home ownership in the city for first-time buyers.

The transactions at Mount Nicholson, comprising 19 detached houses and 48 flats over three phases, broke the city’s previous price record, when a buyer paid HK$105,000 per sq ft for a HK$522 million duplex penthouse at Henderson Land Development’s 39 Conduit Road project at the Mid-Levels.

Hong Kong’s private home prices have increased by 430 per cent since 2003, making it the world’s most expensive urban centre among 406 cities to buy a home in, according to the Demographia International Housing Affordability Survey.

For the time being, Carrie Lam’s plan has about as much chance as that of King Canute.