The Peak may still be Hong Kong’s priciest neighbourhood – but homes in Southside, Pok Fu Lam, Mid-Levels and Happy Valley are all making money faster, wherever counting the capital gain or annual rental increase you can hope to bank

If you bought a “typical” home in Hong Kong’s priciest district in 2009, and still own it, your capital investment would have increased by just 39 per cent.

Renters in the same area – The Peak – would be paying just 11 per cent more today than 10 years ago. Rentals and purchase price differentials in our city vary markedly from district to district. But according to Knight Frank, who have compiled data on the top five – The Peak, Island South, Mid-Levels, Happy Valley and Pok Fu Lam – The Peak remains the most prestigious home address in Hong Kong, despite its relative underperformance.

Average sale price in January 2009: HK$30,500 (US$3,935) per sq ft; in March 2020: HK$42,400.

Capital gain increase: 39 per cent; rental increase: 11 per cent.

Set high above the city on Hong Kong Island’s tallest mountain, with abundant greenery and spectacular views, The Peak has been a domain of the elite since colonial times. Never mind that it has no MTR and road access can be perilous; living there is a sign of status.
Here, trophy homes have changed hands at eye-watering prices. A single family home on Pollock’s Path sold for HK$2.8 billion in 2017, while a year earlier, 15 Gough Hill Road sold for a then-record HK$2.1 billion. In 2018, House 2 at Mount Nicholson changed hands for HK$1.4 billion, after its neighbour sold for HK$1.16 billion a year earlier, according to Christie’s Real Estate.

While those properties are a rarity, Knight Frank’s data covers homes considered typical for the area, which in the case of The Peak means an average of 3,000 sq ft (278 square metres). “We’re comparing apples with apples,” Martin Wong Shiu-kei, associate director, Greater China research and consultancy, Knight Frank, said of the data.

In terms of capital gain, homes on The Peak rose the least among five districts covered – but Wong says this has not dented its prestige status. Those that can afford to buy do, mindful of the limited supply; those who’ve managed to hold onto a sufficiently generous expat package rent there for the same reason.
The data “doesn’t mean The Peak is not valuable – it’s still the most valuable [district],” Wong says. Its relatively low percentages are reflective of the high base in prices and rents, he explains.

Says Wong: “Lots of celebrities and rich people are still living on The Peak, and lots of investors are looking to buy” – mainland tycoons in particular, he adds. As for low growth in rental yield, he adds that people who own property on The Peak “are not just looking for rental returns”.


Average sale price in January 2009: HK$13,400 per sq ft; in March 2020: HK$31,000.

Capital gain increase: 132 per cent; rental increase: 21 per cent.

An easy commute to the office has traditionally made Mid-Levels an attractive home for businesspeople and senior bankers working in Central. Younger expats are also drawn to the social scene within walking distance, at Soho and Lan Kwai Fong, and the quirky shops along Hollywood Road.

Today, says Wong, those attractions remain. When it comes to prestige though, density is higher than on The Peak, and the environment less exclusive. Home sizes here are usually a bit smaller than their neighbours further up the mountain, averaging 2,500 sq ft in the “basket” of properties in Knight Frank’s data. Supply is more abundant here, and another difference is that there are also many more flats than houses.

For investors focused on short-term, rather than long-term gain, properties in Mid-Levels could be relatively easier to turn over, Wong adds.

Island South

Average sale price in January 2009: HK$15,300 per sq ft; in March 2020: HK$31,100.

Capital value increase: 104 per cent; rental increase: 16 per cent.

Wong says Island South could be considered as a more economical version of The Peak. It’s not connected to any immediate busy areas, so is quieter and greener than other urban districts, but there’s also no MTR line. Home sizes are around the same, at 3,000 sq ft.

That said, the district recorded one of the priciest sales of 2019, with HK$1.45 billion paid for a house on Headland Road, Repulse Bay.

Proximity to beaches and the coast is a major drawcard for residents and visitors alike. The network of international schools nearby is also attractive to expats, Wong says.

Happy Valley

Average sale price in January 2009: HK$12,700 per sq ft; March 2020: HK$31,000.

Capital value increase: 136 per cent; rental increase: 21 per cent.

Happy Valley is “considered exclusive”, and quite tightly held by owners and renters, Wong says. Once again, the district is not connected to the MTR, but residents do love their trams. The hustle and bustle of Causeway Bay, its nearest neighbour, feels a world away.

“When you’ve grown up in Happy Valley, you usually stay there,” Wong says.

The price growth is a reflection of the traditional reputation of Happy Valley, he adds. “You don’t see any public housing or relatively low-end development in the district. Overall, the perception is still high-end and this has been maintained over the years.”

Pok Fu Lam

Average sale price in January 2009: HK$12,400 per sq ft; in March 2020: HK$24,900.

Capital gain increase: 101 per cent; rental increase: 40 per cent.

Rentals have risen in Pok Fu Lam more than any of the five districts covered in Knight Frank’s data. However, it’s still more affordable than other luxury areas. “You’d need a high income, but not super-high, to live there,” Wong says.

He says you can rent a three-bedroom flat in Pok Fu Lam for about the same as a much smaller flat in Mid-Levels, so this is attractive to families. There is no MTR line, but a very good network of buses and mini buses, Wong says, adding that “most of the residents would have cars”.

The top five districts in Knight Frank’s data are all on Hong Kong Island, and Wong sees no other contenders on the horizon to usurp them. That might change one day, but there’s no sign of it right now, he says.