The bar for luxury residential real estate in Hong Kong, already one of the most expensive areas in the world, has been raised.
The Peak, at 1,811 feet above sea level, is the highest point on Hong Kong Island and has symbolized prominence and wealth since the 19th century. Formally known as Victoria Peak, it towers above the heart of the city and has spectacular, 360-degree views of all of the surrounding islands. To live there signifies a status level for which captains of industry from around the world are willing to pay top dollar.
Last month, The Peak exceeded its own lavish reputation, with local headlines claiming it is the site of the most expensive residential piece of land in the world. The government land auction of 12 Mount Kellett Road fetched $231 million from Sun Hung Kai Properties -- 134 percent of the opening bid and a projected $5,417 per square foot.
And that's for just the land.
Why the historic high price? It's a simple supply-and-demand equation. Property here, the most sought-after low-density neighborhood in Hong Kong, comes available so infrequently that some of the world's richest line up to buy.
At The Peak, "less than 50 properties will be available in the next two years," according to Buggle Lau, the chief analyst at Midland Holdings, a real estate brokerage company selected by Forbes as one of the best small Asian companies in 2006.
Luxury throughout the world is difficult to compare, but there are interesting ways to track residential riches, according to Liam Bailey, head of residential research at the global property agency Knight Frank.
Bailey is based in London, which happens to be the most expensive city per square foot in the high-end market ($3,051 on average and $5,800 at the very top, for those keeping track). By square foot unit price, Monaco is No. 2, with a high-end average of $2,673. Hong Kong is No. 3 at $2,008 and New York, the highest-ranking U.S. city, is No. 5 at $1,796.
High-end real estate is also tracked by how many square feet you can buy for $1 million. In London, $1 million gets you 328 square feet. In Monaco, it's 374. In Hong Kong, it's 498 and in New York, it's 557.
In Hong Kong, nearly 7 million people live on about 425 square miles of space. With the city's land reserve policy in place, land is a limited and valuable commodity.
In simple terms, the government in Hong Kong controls land availability. Land is listed for sale, and interested applicants submit bids to the government. The right price triggers the government to release the land and auction it off to the highest bidder.
It doesn't happen often. Before the Mount Kellett property, the last government auction for land at The Peak was seven years ago.
I can still remember The Peak from my childhood. A happy playground, it provided our family a chance to escapes the hustle and bustle of the city.
Twenty-some years later, I've moved back to Hong Kong and The Peak still strikes its same peaceful purpose -- it is just as green, with views as stunning as ever.
Time, however, has changed my perspective. Now I notice the flashy sports cars cruising down private roads to houses and infinity pools hidden behind security gates and cameras.
I'm ready to explore the grown-up playground.
"Should I take my shoes off?" I ask, knowing this is common practice when entering people's homes in Asia.