East Rail cross-harbour line to benefit new homes in the New Territories
Home prices will gain additional momentum in the short-to-medium term
HONG KONG, 2 June 2022 – Capital values of residential properties along the East Rail Line New Territories portion will gain extra momentum over the short-to-medium term, thanks to the significant infrastructure enhancement by the opening of the new East Rail Line cross-harbour section, according to JLL's Hong Kong Residential Sales Market Monitor released today.
The addition of the new railway service has always been seen as a positive factor for property values in the surrounding neighbourhoods via stronger demand. A recent example is that of Whampoa. According to JLL estimates, the residential price in Whampoa rose 24% compared with 19% in the overall market between the period when Whampao station of the Kwun Tong Line extension opened in Oct 2016 and year-end 2017.
The extension of the East Rail Line to Hong Kong Island will substantially shorten the travelling time between the New Territories and the urban areas on Hong Kong Island. Such improved connectivity should be conducive to demand for residential properties in the New Territories supporting their capital values.
Norry Lee, Senior Director of Projects Strategy and Consultancy Department at JLL, said: "Residential prices in the New Territories have outperformed in recent years, having climbed by 5.1% in 2021, above the city overall growth of 4.9%. With this significant infrastructure enhancement, New Territories residential capital values are expected to gain additional momentum over the short-to-medium term.”
According to our forecast, 21% of supply between 2022 and 2024 are located along the East Rail Line, amounting to some 12,500 units. Among them, approximately 75% (~9,600 units) are situated in the New Territories portion, while Kowloon and Hong Kong Island portions take up 24% and 1% respectively.”
Nelson Wong, Head of Research at JLL in Greater China, said: "With East Rail Line cross-harbour section as a favouring factor, a number of upcoming projects will likely be well sought-after upon launches. As long as reasonably priced, they carry great potential to make the next “hotcake”, repeating the sale performance of ‘Pavilia Farm’ and ‘Grand Mayfair I’.”
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