Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Hong Kong Real Estate On the Rise

HONG KONG -- Michelle Liu had put her year-old daughter to bed and was about to turn in at 11 p.m. when the doorbell rang.

Opening the door a crack, she heard the cheery voice of a real estate agent named Chen, offering her 10 million Hong Kong dollars ($1.28 million) in cash for her Kowloon apartment.

Why would anyone offer a suitcase full of bank notes for a scruffy slice of a five-story block lying in the noisy flight path to nearby Kai Tak International Airport?

Because Kai Tak will close next year when a new airport opens farther away. The six-story limit on buildings along the flight path will disappear, and -- so the real estate agents believe -- the Kowloon Peninsula will be free to reach for the skies.

The prospect has sent the property industry into a frenzy. At newspaper stalls, in supermarkets and at noodle shops, Kowloon people gleefully swap tales from the real estate trenches.

Liu said she asked the agent at her door how he knew she wanted to sell. "He said someone had overheard me talking about it in the hair salon that afternoon," she said.

"That's kind of desperate, don't you think? To find out where I live and come so late at night."

Desperate? Maybe, but this is a city so strapped for building space that a modest apartment rents for 40,000 Hong Kong dollars a month and a mansion on the exclusive Peak recently fetched 550 million Hong Kong dollars.

"We're giving people what they want," said Charles Chan of Pan-Win Realty. "Their old blocks don't even have elevators. People now want to live in big complexes with swimming pool, gym, tennis courts and lots of shops."

Chan says old people are keenest to sell because they don't want to spend their last years in what is likely to turn into a huge building site.

And the most reluctant? "Civil servants," he says, laughing. "Foolish people, they think they know everything if they have a friend in the Housing Department, but those guys are clueless."

Joni Li, who lives down the road from Michelle Liu, says she agreed to sell her 72-square-meter apartment for 11 million Hong Kong dollars after real estate agents besieged her for months.

She recalls watching two property agents slug it out under her balcony, throwing handfuls of advertising leaflets in each other's face. "I can't wait to move," she says. "They lie in wait outside my gate. Each one says he has the best offer. They even hang around churches, just like sharks."

But analysts warn that the excited real estate agents may have to wait a long time for permission to start building high rises.

"Redeveloping such a large area must be comprehensively done," says Michael Green of Salomon Brothers investment bank. "Higher buildings mean more people in the area, which means widening the roads, adding sewage pipes and all the other services. The government hasn't even announced the new height restrictions yet."

Green says the land rush is being led by smaller developers who may not realize the risks.

Liu says that four days after her late-night visitation, a rival agent made a better offer of 11.4 million Hong Kong dollars, and she accepted. The amount will buy her a comfortable middle-class apartment.

"I don't have anywhere to live from the end of October,'' she says, "but in Hong Kong we move quickly, so I'm not worried. I feel so rich now I might even stay in a hotel for a while."