Housing is less expensive beyond Hong Kong Island. In the first quarter of 2019, prices in Kowloon were 6 percent lower, and in the New Territories, Hong Kong’s northernmost region, they were 25 percent lower, Mr. Smith said.
To help ease the housing crunch, 97,445 units are expected to be built during the next five years, Mr. Smith said. Because of the scarcity of land on Hong Kong Island, new inventory will be created by razing old buildings for redevelopment. In Central and Western Hong Kong Island, one to two new buildings are expected to be built every year, said James Fisher, director of market analysis and analytics for Spacious Hong Kong, a real estate platform. There is more expansion in the Eastern District of Hong Kong Island, in Kowloon and in the New Territories.
In Mid-Levels, prices for a two-bedroom unit in an older building range from 18,000 to 20,000 Hong Kong dollars ($2,300 to $2,550) a square foot, Mr. Smith said, and new apartments generally sell for 35,000 to 40,000 Hong Kong dollars ($4,460 to $5,100) a square foot.
Who Buys in Hong Kong
Because nonresident buyers have to pay a 30 percent stamp duty, the vast majority of buyers in Hong Kong are mainland Chinese and locals, Ms. Chan said. Foreigners tend to rent, Mr. Fisher said.
“It is not a low-income immigration,” Mr. Fisher said, explaining that residents from mainland China have come to Hong Kong in the past 10 years for “middle-class and executive jobs” once held by British, American, Australian and European expatriates.
“It didn’t help that you had expats in Hong Kong costing so much more than other places in the world,” he said. “Companies thought about how they could localize more.”