Neighborhoods with high tipping points are highly desirable among buyers, who often overpay in terms of property sale price, said Asif Ghafoor, chief executive of Spacious Hong Kong. This premium could be due to expectations of capital appreciation or buyers' intentions to live in the property themselves, he added.
The average tipping point stands at 5 years for Hong Kong permanent residents (PRs) and is three times higher for non-PRs at 15 years.
The difference in prices levels for PRs and non-PRs is due to stamp taxes imposed by the government to cool interest in the property markets from abroad — including from mainland China. Non-PRs pay a 30 percent stamp duty when purchasing property in Hong Kong.
In prestigious neighborhoods, such as The Peak, Shouson Hill, Jardines Lookout and Kowloon Tong, tipping points for Hong Kong PRs stood at 25 years.
For non-PRs, the tipping point for the same neighborhoods is "never" — rental costs will never exceed the cost of buying property.