Opus eyes record price for HK property A room with a view - and a $58m price tag The views it offers across Hong Kong's famous harbour are stunning but it is the price tag attached to the city's newest luxury apartment block that is creating the bigger stir. Each of the 12 Frank Gehry-designed apartments in the Opus development are expected to be priced by developer Swire Properties at more than HK$450m ($58m), a record-breaker even in a city where the average price of homes was the highest in the world last year. At an estimated $9,000 per square foot, Opus aspires to be in the same league as ultra-luxury developments in London and Manhattan such as One Hyde Park and 15 Central Park West. But these are inauspicious times to test the limits of Hong Kong's luxury property market which for several years has relied on demand from mainland Chinese. According to property agents there have been far fewer mainland Chinese buyers in Hong Kong since the start of the year. A worse than expected slowdown on the Chinese mainland coupled with the fallout from the eurozone crisis mean that most analysts are now predicting prices will start to fall in the second half of the year. The city's incoming chief executive has also vowed to increase the supply of mass-market housing, which is expected to push down prices after rising 80 per cent since 2009. We hear a lot of people saying that only prices in the mass market will come down because of the supply issue. But you cannot decouple the luxury end from the rest of the market. How much a first-time buyer pays will affect a chain of three to four other [more upmarket] transactions," says Andrew Lawrence, head of Hong Kong property research at Barclays Capital. Beijing's 2008 $4tn stimulus package unleashed the first big wave of mainland property investors looking for big ticket items to park their assets. The following year, 50 to 60 per cent of new luxury properties were bought by mainland Chinese investors, says Ricky Poon, executive director of residential sales at Colliers. In 2009, average prices for luxury apartments rose 45 per cent from a year earlier, compared with a 27 per cent rise in mass-market properties. While the government provides no official figures, anecdotes abound of mainland billionaires paying cash for multiple units in new luxury apartment blocks near Kowloon Station - a popular neighbourhood for those who shuttle frequently across the border. But that has changed since the beginning of the year, when a combination of a credit crunch in the mainland and a sharp fall-off in demand for Chinese exports have seen their participation in the new-build luxury market plunge to about 30 per cent, says Mr Poon. That is in line with a slowdown in other sectors highly dependent on the disposable income of China's wealthiest: revenue growth in Macau casinos has fallen to just 7 per cent in May compared with a 42 per cent full-year growth in 2011, while luxury spending in Hong Kong and China is also seeing slower growth. Mainland buyers are also venturing further afield for bargains. A recent report found that purchases by non-local Chinese of luxury properties in New York had risen 88 per cent from 2010 and accounted for $9bn of sales in the year to March. Mr Lawrence, who is among the most bearish analysts on Hong Kong property prices, fears there could be as much as a 30 per cent fall in prices across all sectors by 2013. But he estimates that prices in the luxury housing market will slip only 10-15 per cent at the most. Sales representatives of Swire Property deny that the design of the Opus show flat - plenty of chandeliers and a kitchen featuring lots of silver - is meant to appeal to the flamboyant tastes of nouveau riche mainland Chinese buyers. But the fate of Opus - which has units for sale and for rent - is still likely to lie in the hands of investors from north of the border. "Here, you are talking about the ultra-luxury end of the market and only mainland Chinese billionaires who have done an IPO of their own companies are likely to pay for these," says Mr Lawrence. One agent, who specialises in the luxury sector, says there is interest in Opus but it is out of the price range of some of his clients. A mainland client of mine was bowled over by that view. After all, you just don't get a harbour view like that in mainland China. He would pay $38m for it, but no more, so he walked away.