Hong Kong residential price gap between Kowloon, New Territories shrinks by 20ppt over 10 years

New projects in the New Territories are now 21% cheaper than those in Kowloon.

The price premium for new residential projects in Kowloon over that of the New Territories has narrowed by about 20 percentage points over the past 10 years, according to JLL's Hong Kong Residential Sales Market Monitor.

Figures from JLL’s research department show newly launched projects in the New Territories in 2020 were 21% lower in unit price compared to those in Kowloon. The gap was 42% in 2011, suggesting that the price difference between the two regions has narrowed over the past decade. In other words, residential prices for primary projects in the New Territories had grown at a faster pace than those in Kowloon.

As discussed in JLL's Mid-Year Review and Outlook released on 14 July, Joseph Tsang, Chairman at JLL in Hong Kong, said: "With a more comprehensive railway network in the city, the distance factor affecting home prices is diminishing owing to the significantly shorter travelling time between the New Territories and urban districts. Thus, the price gap of residential properties between the two regions has narrowed over the past 10 years."

Norry Lee, Senior Director of Projects Strategy and Consultancy Department at JLL in Hong Kong, noted: "The narrowing gap is mainly attributed to three reasons. First, the 'suburban' nature of the New Territories has become less of a pushback for home buyers as new infrastructure, such as MTR lines, is being developed, reducing commuting time with the traditional urban areas. Second, new town development in the New Territories has enhanced the appeal of the region, most notably in the provision of retail offerings. Third, the preference for space and living quality, lower density development and larger club house facilities increasingly nudge home buyers to target projects in suburban areas."

Nelson Wong, Head of Research at JLL in Greater China, said: "The price gap is expected to continue to narrow going forward. With further built up of train lines in the New Territories, such as Northern Link, residential projects above or near MTR stations will likely receive the most market attention. Consequently, robust sales will be translated into firmer pricing and greater appreciation potential."