Last month, my client Kelvin viewed a unit in a luxury seafront residential area in West Kowloon — it had a 270-degree unbeatable sea view, was spacious and open, yet the price per square foot was surprisingly 15% lower than similar units three years ago. He asked me, 'Weren't seafront properties the most value-retaining before? Why do they feel less desirable now?' This question actually reflects a profound shift that the Hong Kong property market is undergoing.
Over the past decade, 'seaview properties' have always been the 'hard currency' in Hong Kong's real estate market—whether it is Repulse Bay in the Southern District of Hong Kong Island, The Cullinan in West Kowloon, or Lohas Park in Tseung Kwan O, as long as the words 'seaview' are attached, the premium can easily reach 20-30%. But entering 2024, this iron rule is loosening. According to the latest data from Centaline Property, the premium rate for seaview units has fallen from the peak of 28% to 12-15%, and some second-hand units have even experienced an inversion where 'seaview is less desirable than city view.'
What exactly happened? Is this a short-term adjustment or a long-term trend? As buyers or investors, how should we respond? In today's article, I will use data and real-world cases to unpack the truth behind the reduction in premium of seafront properties.
Three Core Reasons for the Reduction of Sea View Premium
Supply Surge: Sea Views Are No Longer a Scarce Resource
Ten years ago, sea view apartments in Hong Kong were indeed scarce. However, as new development areas such as West Kowloon, Kai Tak, and Tseung Kwan O were completed one after another, the supply of sea view units surged. Take West Kowloon as an example: from The Cullinan, The Harbourside to The Arch, there are already over 8,000 sea view units along a coastline of just 2 kilometers. When supply is no longer scarce, the premium naturally falls.
:::tip Insider's observation According to data from the Rating and Valuation Department, between 2020 and 2024, over 15,000 new sea-view units were added across Hong Kong, equivalent to 1.5 times the total of the past ten years. The surge in supply is the primary reason for the reduction in premiums. :::
Shift in Buyer Preferences: Practicality Over Aesthetics
After the pandemic, the logic of Hong Kong buyers in property purchases has changed significantly. Compared to 'Instagram-worthy sea views,' they care more about:
- Transportation Convenience: Is it possible to reach the MTR station within 10 minutes?
- Living Amenities: Are there supermarkets, clinics, and restaurants downstairs?
- Usable area: With the same 8 million budget, a sea view property might only have 400 square feet, but an older building in the city can offer 500 square feet.
Sarah, who works in the financial industry, told me, 'I work overtime every day until 10 PM. When I get home, I just want to collapse into bed, and I don’t have time to enjoy the sea view, no matter how beautiful it is. Instead, having a 7-11 and a tea restaurant downstairs is more practical.' This mindset is very common among homebuyers in their 30s to 40s.
The Normalization of Remote Work: Landscape Values Are Being Redefined
During the pandemic, a large number of workers experienced the work-from-home lifestyle. In theory, this should increase the appeal of sea-view apartments (being able to see the sea while working from home). But in reality, the opposite was true — when people were confined at home for long periods, they discovered:
The 'freshness' of the sea view fades quickly. The first month it feels beautiful, but by the third month you hardly notice it. On the other hand, practical amenities like 'having a park downstairs for walks' or 'having a nearby café to change your environment' become more valuable.
:::highlight Data speaks Survey by Midland Realty shows that in 2024, when buyers choose properties, the importance of 'view' has dropped from 2nd place in 2019 to 5th place, being surpassed by 'transportation,' 'school network,' and 'living amenities.' :::
Practical Case Study: The True Stories of Three Seaside Properties
Case 1: The Harbourside West Kowloon vs Yau Ma Tei Old Buildings
Reign Over the World: Middle Layer of 2 Towers
- Usable area: 420 sq ft
- View: Victoria Harbour Sea View
- Transaction price: 8.8 million (March 2024)
- Price per square foot: 20,952 yuan
Yau Ma Tei Pik Street Tong Lau
- Usable area: 520 sq ft
- Scenery: Street view
- Transaction price: 6.5 million (March 2024)
- Price per square foot: 12,500 yuan
On the surface, the price per square foot of The Harbourside is 67% higher, but what about the actual living experience? A unit in Yau Ma Tei is a 3-minute walk to the MTR station, with a street market, diners, and pharmacies downstairs, making daily life far more convenient. Residents of The Harbourside have to go to Olympian City for shopping, which is a 15-minute walk.
:::tip Expert Opinion For first-time homebuyers with a limited budget, 'trading view for space and location' is often a wiser choice. You can enjoy the sea view by visiting the seaside boardwalk on weekends, but the daily commute time and convenience of living are the factors that truly affect the quality of life. :::
Case 2: The 'Sea View Trap' in Tseung Kwan O's Lohas Park
Sunrise City mainly promotes 'affordable sea view units,' but many owners only realize after moving in:
- The so-called 'sea view' is actually a view overlooking Tseung Kwan O Industrial Estate.
- Some units are blocked by the buildings in front and can only see a 'partial sea view'.
- Insufficient transportation facilities; need to transfer twice to get to work.
2023 In the year when Phase 13 of Lohas Park 'MALIBU' was launched, the developer promoted 'sea view units,' but in reality, only the units on higher floors had an actual unobstructed sea view. As a result, the resale prices of lower-floor 'sea view units' were even lower than those of non-view units in the urban area during the same period.
:::warning Guide to Avoiding Pitfalls Before buying a sea view property, be sure to inspect it on-site:
- Personally go to the unit to check the view (don't just look at the computer renderings of the show unit)
- Check if there are any unfinished construction sites in the front row (which may block the view)
- Understand the future development plans of the surrounding area (the government website provides access to the outline zoning plan maps)
:::
Case 3: Repulse Bay, Southern District of Hong Kong Island — An Exception in the High-End Market
It is worth noting that not all sea view properties are depreciating. Traditional luxury residential areas on the south side of Hong Kong Island, such as Repulse Bay and Stanley, still maintain a solid premium for sea views. There are three reasons for this:
- True scarcity: These locations are geographically limited, and supply cannot be increased.
- Different buyer groups: Mainly high-net-worth individuals, with low sensitivity to price
- Lifestyle Premium: You are not just buying the view, but the entire community atmosphere and level of privacy
2024 In the first quarter of the year, luxury home transaction prices on Repulse Bay Road remained stable at HKD 40,000-50,000 per square foot, with a sea view premium rate maintaining above 35%.
Strategies for Investors and First-Time Home Buyers
First-Time Homebuyers: Rationally Viewing the Premium for Sea Views
If you are a first-time homebuyer, my advice is:
The priority should be: location > transportation > amenities > view
Specific operations:
- Budget 6-8 million: Consider old buildings in the urban area or new developments along the New Territories railway line, give up the sea view.
- Budget 8-12 million: You can consider a 'secondary sea view' (such as having a view of the sea but not a frontline sea view) in exchange for a larger area.
- Budget over 12 million: only then is it recommended to consider truly high-quality sea view units.
:::success Practical tips Using the 'compare mortgage to rent' logic: if a sea view premium causes the monthly mortgage payment to increase by 5,000 HKD, but the rent difference in the same area is only 2,000 HKD, then this premium is not worth it. Remember: the primary considerations for owner-occupied property are 'living comfortably' and 'affording the mortgage,' not 'whether the view is nice.' :::
Investors: Reassessing the Value Retention Ability of Seaview Properties
For real estate investors, the reduction in the sea view premium is an important market signal:
Short-term (1-3 years): The rental return of sea view properties may not meet expectations. For example, in West Kowloon, the rental return for sea view units is about 2.5-3%, lower than the 3.5-4% for non-view units in urban areas.
Medium term (3-5 years): It is necessary to closely monitor the supply situation. If the supply of sea-view units in a certain area continues to increase, the premium may further narrow.
Long-term (over 5 years): Truly scarce sea-view locations (such as the Southern District of Hong Kong Island and Clearwater Bay in Sai Kung) still have potential to retain value, but sea-view properties in new development areas require caution.
:::tip Professional advice Before investing in a sea view property, complete these three tasks:
- Study the area's supply for the next 5 years (can refer to the government's land sale plans)
- Calculate whether the 'sea view premium rate' is reasonable (compared to non-sea view units in the same area)
- Assess whether the tenant group is willing to pay a premium for the sea view (foreign tenants are usually more willing, while local tenants are more rational).
:::
Special Opportunity: The Investment Value of 'Sea View Discount Properties'
Interestingly, the reduction in the sea view premium has also created new investment opportunities. Some owners, due to urgent sales or misjudgment of the market, will sell sea view units at 'below market price.' If you can buy truly high-quality sea view units at a 'non-sea view price,' they still have potential for appreciation in the long run.
Three Indicators to Identify 'Xun Pan':
- The transaction price is within 10% below the price per square foot of non-sea view units in the same area.
- The view is truly open (270 degrees or more)
- The location itself has fundamental support (complete transportation and amenities)
Summary: Ocean-view houses are not unbuyable, but you need to 'buy wisely'
The premium for sea-view properties has decreased, but this does not mean that sea-view houses have completely lost their investment value. The key lies in:
- Understand the Supply and Demand Relationship: Seaside properties in newly developed areas have ample supply, so the premium naturally decreases; the scarce sea views in traditional luxury residential areas still hold value.
- Rationally Assess Needs: Buyers primarily for self-occupation should prioritize practicality; buyers primarily for investment need to calculate rental yield.
- Grasp market misallocation: When the market is overly pessimistic, high-quality sea view properties may experience a 'value trough'.
Hong Kong's property market is entering a new phase of 'rational return.' The previous simple logic of 'having a sea view will definitely appreciate in value' no longer applies. As savvy buyers or investors, we need to analyze the real value of each property more carefully, rather than blindly chasing the label of 'sea view.'
Remember: Good property investment is never about chasing concepts, but is based on solid fundamental analysis.
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Recommended Further Reading:
- Top 10 Hong Kong Property Market Trends Forecast for 2024
- "A Must-Read for First-Time Buyers: How to Buy the Most Cost-Effective Unit with 6 Million"
- The Five Deadly Mistakes Commonly Made by Investment Beginners
Remember: In this marathon of the property market, running fast is not as good as running steadily. Only by mastering the correct information and strategies can one remain invincible in Hong Kong's real estate market.