Posted by
OffThePeak
11 yrs ago
Carib.Coast catches D-Bay
Caribbean Coast (Tung Chung) property prices have caught up with Discovery Bay prices
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Chart:
http://img4.imageshack.us/img4/2638/dbayccoast.jpg
Time was, when I lived in Tung Chung, properties in D-Bay were thought to be worth a premium, of up to 50% relative to CC - in terms of the price per sf.
But now as the old song says: "The thrill is gone." D-Bay no longer sells for a premium to CC.
Why?
I thought a discussion on this might be of interest to some here.
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Remmy
11 yrs ago
Park Island is also rapidly catching up and likely to pass DB.
There were too many expats in the past going straight to DB because they knew no better, but that has really changed now.
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The big addition to supply (Chianti & Amalfi) may have also helped to hold down prices, and the fact that with so many new families moving in, it may be harder to get children into the nearby school
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For high rise I would agree that CC and Park Island are comparable. But for expat families, the quality and choice of low-rise with gardens in DB is hard to match anywhere in HK.
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mariekylie - yes, but its a bit different to rest of HK. Holiday camp feel to it. For young families, it works very well. Schooling beyond primary age (over 12) has been an issue in the past but with Discovery College there and DBIS extending into high school there is more choice now. There's some great value in the medium price range low-rise developments - Siena 1 and 2, Caperidge, Seabird in particular. If you are an investor, the rental yields will be very good (4% plus) as most expat families have no option but to rent now with Special Stamp Duty. You can get loads more info on DB via google/other websites.
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MarieKylie,
DBay is very "expat oriented", and you will find that most people living and working there have a good command of English. Also, you will find many more expats living there (as a percentage of residents) than most places in Hong Kong.
But because cars are not allowed, you will become very reliant on buses, ferries, and walking - unless you have HKD 2 million to spend on a Golf cart.
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Tung Chung becomes more "central" to the Pearl River Delta as new infrastructure is added
Conceptual Scheme of the Railway Corridor
http://img201.imageshack.us/img201/9621/tcraillinks.jpg
/see: http://www.ourfuturerailway.hk/index.html?p=003
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Remember this ?
Tung Chung site attracts little interest
11-05-2010
A 280,000 square feet waterfront residential site in Tung Chung has been sold at a government land auction for HK$3.42 billion -- well below market estimates. This puts the price per square foot at under HK$2,400. Analysts had expected the site to fetch at least HK$4-billion.
Only three bidders participated in the auction, and the winning developer, Nam Fung, had to keep bidding against itself, just to reach the government's reserve price. The auctioneer, Graham Ross, repeatedly warned during the auction that the government could be forced to withdraw the plot from sale. However, he insisted that it had been sold for a fair price.
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Of course, the problems in Europe and sliding property prices in China haven't helped.
I think this does show that HOPES sometimes get ahead of REALITY
However, it is not a horrible result since:
Land Cost------ : $2,443 psf
Build Cost ----- : $1,500 psf, estimate
Builders Margin- : $1,400 psf (30% of above)
. . . . . . . . . . . : =======
SELLING PRICE?: $5,126 psf : this is above recent average selling prices in CC, but not by much.
Won't push prices higher, I think: considering that this will be a newer building, closer to the sea -
albeit a further walk from the MTR.
But I don't see this auction helping to push up prices in CC.
Those wanting prices to rise in TC will need to find another trigger.
UNQUOTE
====
That's an old post from 2011.
Some agents in TC are now speculating that the new property will be launched at HKD 8,000 per sf. I wonder
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Remmy
11 yrs ago
Another reason Park Island is poised to do so well is due to the requirement for agents and sellers to now mention not just net square foot, but also gross internal size. Units that are genuinely better sized like Park Island will more obviously appear to be better value, so I would think this will have a positive effect also as the gross internal size factor starts to be given more attention by buyers.
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I've never even been to Park Island and a straw poll of a small group of mid-level professionals (mostly lawyers) this morning failed to identify anyone else who has either. I'm really struggling to understand what the attraction is?
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Oh there's Noah's Ark in Park Island! Wonderful isn't it?
Of course, Remy has been talking PI for a long time now, he owns property there.
It's a nice place, don't get me wrong. However, you got to get out of it to get everything in "life". That's an exageration of course, but some truth in it too.
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"I've never even been to Park Island and a straw poll of a small group of mid-level professionals (mostly lawyers) this morning failed to identify anyone else who has either."
THAT suggests a Big Opportunity to me, TI
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Quite possibly - but it still feels and looks (as I drive past it going to and from the airport) both remote and claustrophobic to me. I think I'll pass. If I was going to buy again, I would probably look for older properties around areas being redeveloped or where an MTR line is being extended. I strongly suspect these are what a lot of other people are looking at as well so finding value would remain an issue.
That said, it's getting harder to find value in the sharemarket now than it was six months ago. Possibly time to just watch and wait?
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Yeah
I think those places have already moved up in price.
Maybe there's opportunity around Tuen Mun, if Qianhai, north of the border takes off:
http://tinyurl.com/GEI-Qianhai
In fact, developments there could help Tung Chung and even DB as well.
(Wouldn't Lloyd be surprised if Tuen Mun zoomed past Mid-levels someday in the future- Haha)
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Maybe. I don't know the area well enough to comment but if there is potential, is it enough to justify holding for long enough to avoid the SSD? One of the problems with SSD is that if you buy you have to be prepared to hold for three years or face a heavy penalty if you want to get out.
Of course, making investors stay out of the market is exactly what the government wanted and, as far as I am concerned, they have partly succeeded in that I would need to be a lot more confident in future price appreciation than I am today before I would invest again (buying for yield is too hard at the moment).
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The other possibility is to buy some so very cheap, that you can afford to "take a hit", and there's still upside.
I have a few ideas like that, but am not willing to post them here just yet.
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You can also rent a golf cart in DB for a mere 8-9k a month.. LOL.
While visiting there recently and waiting for the bus back to TC to pick up my car, I couldn't help thinking that DB is one of the most inconvenient places in HK to live. For those working in Central it's somewhat better, but even so the commute to the ferry pier from most places in DB is hardly desirable.
As someone else pointed out, it has a holiday camp feel to it... somewhere in the twilight zone.
Its true about the rental returns being high, but I would love to know the vacancy rate in DB... Many of the places such as Vista Court seem almost abandoned... Furhermore, according to data, DB had a growth of 1.7% in comparison to the nearly 20%growth for the rest of HK in 2012... That said, there might be some bargains there at the moment. It will also be interesting to see if te opening of the Auberg will have any impact on prices?
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rob_378 - wow, 1.7% growth vs 20% average indicates value to me, very interesting! Where did you get the 1.7% data from? I'd like to see that split between high rises and low rises but suspect that might not be available.
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"I would love to know the vacancy rate in DB... Many of the places such as Vista Court seem almost abandoned..."
Well, the best independent measure is Rental yields - which are now higher in DB than elsewhere. Expats now find it harder to buy, and are "forced" to rent, and so expat-friendly DB may see a trend of rising yields, until more HK owner occupiers discover the "value" in the place.
I spent some time yesterday with a friend who has lived there since 2009, and he told me he is beginning to see more Mandarin speaking Chinese there. He thinks they are mainly those who were educated abroad in the US, UK, etc.
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Remmy
11 yrs ago
OTP - this is also the exact trend happening on Park Island. The ratio of expats moving and living there is constantly increasing.
OTP - regarding your comment to TI's comment that "I've never even been to Park Island and a straw poll of a small group of mid-level professionals (mostly lawyers) this morning failed to identify anyone else who has either." "THAT suggests a Big Opportunity to me, TI"
I agree entirely. My entire approach to investment has been to buy assets that are currently not popular, but have the potential to be. So, when I invested in property on Park Island, this factor was a big BUY signal to me. Similarly I invested in Wan Chai, Sheung Wan, and Sai Wan for these same reasons. When making such investments you need to be willing to wait, and also keep monitoring relevant developments.
So when I invested in Wan Chai, my thinking was "its close to Central, but its seem as a sleezy area. But this will eventually change, and given the close proximity to Central I can buy now cheap and then sell when things change).
When I invested in Sheung Wan and Sai Wan the view from many was "this is an old peoples area where local CHinese fisherman and herb sellers live. Richer Chinese will not want to live there, and foreigners prefer the mid levels. Again, this was a strong buy signal to me.
For Park Island, the very high quality, combined with the fact that expats were only discovering it appealed to me. Of course I did further reaearch. I went over and spoke to to many residents living there (as I am also very cautious of anyting appearing "too good to be true". Almost universally, the feedback was that residents loved living there, "Park Island is the best place we ever hace lived", "we would never live anywhere else" etc. So given how cheap it was, and given my expectation of strong demand I invested there and have done very well. A further very big plus for Park Island is the gradual relaxation of access to the island via public road. Eventually, I hope, they will allow private cars. If/when that happens I think prices could possibly double as you would get one of the best quality places to live in HK in terms of environment, facilities, construction quality etc, fully connected to HK and less than 15 mins drive to Central.
TI - can I suggest you go over and take a look. I would be interested to hear your thoughts after you have gone over.
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Remmy,
You mentioned high efficiency on PI. How high is it?
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Another question Remmy - does PI have a decent range of low-rise units, and some with gardens? Unless it has a good supply of these, it won't/can't compete fully with DB for a lot of expats with families. DB has many units in that category - Siena 1 and 2, Caperidge, Crestmont, Seabird, Seahorse, Seabee, Headland plus the new ones in Amalfi.
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"does PI have a decent range of low-rise units, and some with gardens?"
What do they cost?
Many of the DB Garden flats have reached prices, where they are out for reach from mere mortals
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(reposted from the Main thread):
I see that the D-Ferry operator is being allowed to put up prices again - this time by 9.5pc.
In a weak market like this, I wonder what this will do to property prices in DB?
... even Park Island may see some negative impact
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On other DB threads, you will find comments warning you about the attitude of HK Resorts:
"...db where you are hostage of the hkr management"
What's going on with the Fare rise?
It seems that they have finished building out the South, so they are trying to maximise their revenues by raising ferry fares.
They are still building in the North, but the main access there is the MTR, which is someone else's monopoly. HKR only skims on the bus service. I think the government should open up some competition for other co's to provide transport service to (at least) DB- North.
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(Duplicate Post - Relevant here)
gdep, your:
"it costs 1650/month for an adult extra to central vs mid levels.. for a couple 3300/month.. if you arent living in those low rise big homes.. its not worth living in Dbay.. "
Maybe DB-South will turn out to be a good (cheap) place for retirees who can stay there, and not have to travel everyday
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ticktock's comment:
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"DB will continue to be a really good option for (more affluent) families with kids who either aren't used to, or don't like, living 22 floors up in a soul-less apartment block. The ferry price rises are a pain but material for low-rise units. I do agree that price rises may impact smaller/high-rise DB units."
Yeah, if one is "affluent" enough that a 10% jump in transport costs is of little concern, and/or...
For those folks living on "bubble land" on Expat Housing allowances, will care little, since they will just pass the cost on to their employers.
But for those who spend their own money, and who have limited resources, or for those who own property in DB, will find it to be a bit of a shock.
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