Where no cars go

March 8, 2013 at 12:00 am  •  Posted in Articles by

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Houses cluster around snaking streets that stretch up hills on Lamma Island, a small enclave in Hong Kong characterised by overgrown jungle and dramatic beaches. Lamma, a 30-minute ferry ride from the city, is best known as a hippy haven for long-term expats. But its reputation is changing as higher-paid professionals move there to take advantage of the island’s car-free lifestyle and spacious houses.

“When we arrived 25 years ago you could barely find Lamma Island on a map,” says Simon Twiston Davies, former chief executive of the Cable & Satellite Broadcasting Association of Asia (CASBAA) and owner of two neighbouring village houses on Lamma. “Back then, when you explained you lived in Lamma to a local they had never been there. There has been a dramatic change.”

Englishman Twiston Davies moved to Lamma in 1987, attracted by the slow pace of life (the island prohibits cars and the only way to come and go is by boat). In 2000 he bought his first house, located a bracing 15-minute uphill walk from the main Yung Shue Wan ferry pier, for more than HK$2.5m (£213,000). Thirteen years later, prices have more than doubled. While it used to be hard to buy the basics, Lamma today supports a handful of trendy cafés and an organic supermarket. Even the local Chinese butcher stocks cuts from Argentina and Australia.

Residential property in Hong Kong is among the highest priced globally, and the city is the most expensive location in the world for high-end rented accommodation, according to ECA International. Due to limited land availability and high demand to live centrally, house costs are particularly high on Hong Kong Island, a crowded urban mecca of malls and skyscrapers. Villages, by contrast, like those on Lamma Island, offer serene surroundings and outdoor living for cheaper prices. Twiston Davies’s detached house not only has a barbecue area and a large roof terrace, but also al fresco seating in a front garden with a view of the ocean.

“A lot of people have been priced off Hong Kong Island and have started looking at alternatives such as Lamma, Sai Kung, and Clear Water Bay,” explains Simon Smith, head of research in Hong Kong for international property agent Savills. “Even as rent is cooling on Hong Kong Island, it is still rising in these fringe Kowloon and New Territories locations.”

Village houses, unique to Hong Kong, are a product of the 1972 Small House Policy. Legislation – often criticised for being sexist – gives each male adult the right to build one home of no more than three stories and a footprint of 700 sq ft in their ancestral village, providing they can prove line of descent from a New Territories family. Village houses can be sold to anybody and prices range from HK$6m to more than HK$50m (£513,000 to £4.2m). Between 1972 and 2012, more than 30,000 village houses were built in Hong Kong, with around 10,000 applications still awaiting approval. Though overdevelopment is a concern, extensive growth is unlikely as the procedure for obtaining permission is long and complicated and some land is exempt because it is protected by national park status.

Former fishing neighbourhoods such as Sai Kung and Clear Water Bay in the eastern New Territories offer glistening coastal views. According to Smith, the market in these fashionable locations has been “very hot” in recent years. Goodland Agency Ltd is marketing a four-bedroom village house with a swimming pool in Clear Water Bay for HK$78m. In Sai Kung, a five-bedroom village house advertised by Goodland with garden, pool and sea views is HK$70m. In the same area, KPC Agency is listing a three-bedroom village house with garden, sea view and communal pool and gym for HK$38m.

Building a village house has become a tempting redevelopment opportunity. Daniel Fu, a 46-year-old British-born Hong Konger, has rights to build in his ancestral village Man Uk Pin, located in the northeast New Territories. Fu owns multiple houses in the isolated former farming village, in which he sees “future potential” in the community of fewer than 50 houses.

In 1990, when Fu first arrived, Man Uk Pin consisted of an elderly population as most of the young had emigrated. Now a more cosmopolitan crowd is settling there. “In most other cities in the world, travelling 40 minutes into [the Central Business District] is not considered isolated,” explains Fu. He says expats are more attracted than locals as “your average Hong Konger probably values convenience over aesthetics”. Fu is offering to rent a four-bedroom property, with a rare 4,000 sq ft garden, parking, and staff space for HK$33,000 a month.

The changing nature of these villages can cause problems. Locals, afraid of being priced out, can be unwelcoming to expats. Development means that idyllic rural settings sometimes become overpopulated. Stringent government rules on the size and shape of village houses, combined with poor urban planning, can lead to unprepossessing clusters of homes.

Buying a village house can also be a legal minefield. Some have defective title deeds; others unauthorised structures that risk demolition. Banks are cautious in lending for village houses as it remains a new secondary market, meaning buyers must provide larger down payments.

Such issues aside, a village house can offer qualities prized – but rarely attained – in frenetic Hong Kong, namely, space and tranquillity. These are what Twiston Davies values most on Lamma Island. “It’s very calming if you’ve been in the city and you’re sitting in the front here having a gin and tonic at the end of the day,” he says, indicating the stone goldfish pond in his garden. “There is no traffic, no crowds, only the swishing of fish.”

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