How much will upcoming MTR developments influence district property prices?

Posted: Aug 11 2017Last Updated: Aug 11 2017
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11 Aug 2017 - The railway network in Hong Kong is said to be one of the most convenient in the world. To better serve and connect the dense population in the city, the government continually strives to expand the railway network. Many households choose to buy their homes near MTR stations for convenient access around Hong Kong which contributes to high property prices. Therefore, the new railway infrastructure is expected to have a positive effect on the residential values in the nearby districts.

 

Historical impact of MTR developments on the Kwun Tong Extension Line and South Island Line

The city’s railway network launched two more lines in 2016 - Kwun Tong Extension Line on Oct 23 and South Island Line on Dec 28. The 7 stations along the two railways house a population of approximately 350,000.

According to JLL, this ‘MTR Effect’ led to an upsurge of 90% and 85% in residential property prices at Whampoa and Ho Man Tin respectively from the development’s announcement in December 2009 to the official opening of Kwun Tong Extension Line.

The commencement of South Island Line that covers the journey from Southern District to Admiralty and Central within 11 minutes caused rising household interest in relocating to the area. The Land Registry’s records showed the average sales price of South Horizons flats in Ap Lei Chau has increased from HK$13,320 per square foot in January 2016 to HK$17,000 per square foot in July this year. 

 

Impact of residential property prices near the Shatin to Central Link

After a 20-year discussion, the government finally approved the development plan for the Shatin to Central Link in 2010. The route is divided into two sections, Tai Wai-Hung Hom and Hung Hom-Admiralty Segment, with a total of 10 stations, of which 5 are new. They are Hin Keng, Kai Tak, To Kwa Wan, Ma Tau Wai and Exhibition Station and 4 of them are in Kowloon side.

Tai Wai, To Kwa Wan and Kowloon City, houses over 100,000 residents, but they mainly rely on road-based public transportation. The new line not only provides convenience to residents but also unlocks the growth potential of the residential property market near the new stations. According to Midland Price Chart data, the average price per square foot in Kowloon City district has risen 46% since the construction was confirmed.

Launched 2015 - 2017, there are 18 new residential developments along Tai Wai-Hung Hom segment while most are in Kai Tak. Despite the influx of new property units, the price uptake for rent and sale is projected to be increasing aggressively, with reference to the 50% increase in property prices of the stations along the West Rail Line from 2009 to 2011.

 

Impact of residential property prices near the Express Rail Link – Hong Kong Section

Officially confirmed in 2009, the Express Rail Link- Hong Kong section will set its final stop in West Kowloon Station in the proximity of Jordan, Kowloon and Austin Station. While land around the areas is mostly confirmed for commercial and cultural use, there will not be any new developments available, which means the ‘MTR effect’ mostly benefits second-hand property market.

The closest development to West Kowloon Station – The Austin – records HK$33,600 per square foot recently. While the property price per square foot in Kowloon Station/Olympic Station from HK$9,400 in July 2009 to HK$17,700 July this year according to Midland’s data. Anticipation for the Express Rail Link Hong Kong Section launching in third quarter 2018 will lead to a gradual upsurge on residential values in the nearby estates and districts.

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