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Business Times
21-05-2025
- Business
- Business Times
Hong Kong's rich families sell their own dwellings to cut debt
[HONG KONG] Hong Kong's rich families are learning about the unpredictability of market downturns. Now some have to sell the homes they live in to cut debt. This week, a sea-view villa previously owned by wealthy businessman Chan Ping Che was listed by receivers for HK$430 million (S$71 million). Meanwhile, investment firm Gale Well Group's chief executive officer Jacinto Tong sold his penthouse apartment for HK$138 million last month, according to land registry filings. Chan, known as Hong Kong's 'King of Cassettes' for the source of his fortune, defaulted on a loan worth about HK$350 million in principal and interest from Fubon Bank Hong Kong earlier this year, he said on Wednesday (May 21). Last month, receivers took over the mansion he and his family were living in since the 1980s. Chan had tried to sell the property since late 2023, but did not manage to find a buyer, he said by phone. Hong Kong has seen a flurry of mansion firesales, following years of high interest rates and a property downturn. Despite a recent decline in borrowing costs in the city, residential prices are still hovering at an eight-year low, according to the Centaline Property Centa-City Leading Index. The city's prime office vacancies are set to increase, driving rents down by 8 to 10 per cent this year, according to Colliers International Group. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up 'People often use leverage to purchase additional properties, amplifying returns when prices rise, but also magnifying losses when prices drop,' said Christopher So, a partner at PricewaterhouseCoopers in Hong Kong. 'As the market weakens, rental demand and yields also decrease, impacting cash flow for servicing debt and leading to rising rate of default.' Chan bet big on Hong Kong property, investing in residential units, retail shops and parking spaces. He made his name in real estate in 2017 when he joined a consortium to spend US$5.2 billion to take over most floors of the Center, a skyscraper in the financial hub's business district. He sold two floors to DBS Bank for more than HK$1.3 billion combined last year, according to land registry filings. It was lower than what he paid for, local media reported. For Gale Well's Tong, he and his sister, Rita Tong put about HK$2.2 billion worth of properties up for sale this year, according to data compiled by Bloomberg. They include luxury homes, offices and shop space. In November, Jacinto Tong said that 'making money or posting a loss is a secondary matter, and the most important thing is to avoid negative equity', according to his Facebook post for a hotel sale. He added that the company was trying to maintain a healthy leverage ratio. Tong did not immediately respond to phone calls by Bloomberg News. 'Investors suffering significant losses from office properties might need to consider selling their residential properties to repay debt,' said Bloomberg Intelligence analyst Patrick Wong. The latter are still seeing stronger demand from investors and mainland population inflows, he said. Last year, a prominent local clan led by Ho Shung Pun sold seven luxury houses at the Peak to pay back private loans. The flurry of offerings adds pressure to a property market that's seen one of its longest downturns. Home prices are 29 per cent below their peak in 2021, government data show. The number of households with negative equity – when the value of a property is lower than the outstanding mortgage loan – rose to the highest since 2003 at the end of March. Luxury home transactions have been improving since the last quarter of 2024, but prices are not reflecting the sentiment due to a surplus of distressed assets, according to a Savills report in March. BLOOMBERG
Straits Times
21-05-2025
- Business
- Straits Times
Hong Kong's rich families sell their own homes to cut debt
Hong Kong has seen a flurry of mansion firesales, following years of high interest rates and a property downturn. PHOTO: ST FILE HONG KONG - Hong Kong's rich families are learning about the unpredictability of market downturns. Now some have to sell the homes they live in to cut debt. This week, a sea-view villa previously owned by wealthy businessman Chan Ping Che was listed by receivers for HK$430 million (S$70.9 million). Meanwhile, investment firm Gale Well Group's chief executive officer Jacinto Tong sold his penthouse apartment for HK$138 million in April, according to land registry filings. Mr Chan, known as Hong Kong's 'King of Cassettes' for the source of his fortune, defaulted on a loan worth about HK$350 million in principal and interest from Fubon Bank Hong Kong earlier in 2025, he said in a phone interview on May 21. In April, receivers took over the mansion he and his family were living in since the 1980s. Mr Chan had tried to sell the property since late 2023, but didn't manage to find a buyer. Hong Kong has seen a flurry of mansion firesales, following years of high interest rates and a property downturn. Despite a recent decline in borrowing costs in the city, residential prices are still hovering at an eight-year low, according to the Centaline Property Centa-City Leading Index. The city's prime office vacancies are set to increase, driving rents down by 8 per cent to 10 per cent this year, according to Colliers International Group. 'People often use leverage to purchase additional properties, amplifying returns when prices rise, but also magnifying losses when prices drop,' said Christopher So, a partner at PricewaterhouseCoopers in Hong Kong. 'As the market weakens, rental demand and yields also decrease, impacting cash flow for servicing debt and leading to rising rate of default.' Mr Chan bet big on Hong Kong property, investing in residential units, retail shops and parking spaces. He made his name in real estate in 2017 when he joined a consortium to spend US$5.2 billion (S$6.7 billion) to take over most floors of the Center, a skyscraper in the financial hub's business district. He sold two floors to DBS Bank for more than HK$1.3 billion combined last year, according to land registry filings. It was lower than what he paid for, local media reported. For Gale Well's Mr Tong, he and his sister Rita Tong put about HK$2.2 billion worth of properties up for sale this year, according to data compiled by Bloomberg. They include luxury homes, offices and a shop space. In November, Jacinto Tong said 'making money or posting a loss is a secondary matter, and the most important thing is to avoid negative equity,' according to his Facebook post for a hotel sale. He added that the company was trying to maintain a healthy leverage ratio. Last year, a prominent local clan led by Ho Shung Pun sold seven luxury houses at the Peak to pay back private loans. The flurry of offerings adds pressure to a property market that's seen one of its longest downturns. Home prices are 29 per cent below their peak in 2021, government data show. The number of households with negative equity – when the value of a property is lower than the outstanding mortgage loan – rose to the highest since 2003 at the end of March. Luxury home transactions have been improving since the last quarter of 2024, but prices aren't reflecting the sentiment due to a surplus of distressed assets, according to a Savills report in March. BLOOMBERG Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
19-05-2025
- Business
- Business Times
Top Hong Kong builder sees weekend sales frenzy
[HONG KONG] Hong Kong's biggest property developer Sun Hung Kai Properties sold another 376 flats on Sunday (May 18) after receiving more than 34,000 bids, becoming one of the most sought after projects in months thanks to low interest rates. The new round of sales at Sun Hung Kai's Sierra Sea in the Ma On Shan area comes days after a quick sellout of its first batch earlier last week. The flats sold at about HK$9,645 (S$1,601) to HK$13,500 per square feet. A drop in interest rates is helping the city's residential market. The one-month Hong Kong Interbank Offered Rate, or Hibor, which often serves as a reference rate for mortgages, dipped below 1.3 per cent, the lowest since August 2022. 'The one-month Hibor's plunge could push mortgage rates further below residential rental yields and reignite investment interest in Hong Kong's housing market,' Bloomberg Intelligence analysts Patrick Wong and John Wong wrote in a note on Friday. They also expect monthly new-home sales in the Asia financial hub to jump by 36 per cent from 1,100 units in April. The company sold all 160 units in the 1B phase of the same residential development within hours on Wednesday. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up Home value for secondary transactions slightly edged up as borrowing costs lowered. Centaline Property Centa-City Leading Index, a gauge for second-hand home prices, climbed by about 0.26 per cent in the week to May 11. Any further advancement in the secondary market will depend on whether the US Federal Reserve cuts rates in June, said Willy Liu, chief executive officer of Ricacorp Properties. Lower interest rates are helping increase the chances of Hong Kong's residential property market bottoming out, according to Jefferies Financial Group. Justin Chiu, executive director of CK Asset Holdings, said Hong Kong's property market is at a 'turning point', and he expects property prices in the city to rise, according to an interview with local media on Monday. The city's home prices are 29 per cent below their peak in 2021, data from the government show. The number of households with negative equity – when the value of a property is less than the outstanding mortgage loan – rose to the highest since 2003 as at the end of March. BLOOMBERG
Business Times
19-05-2025
- Business
- Business Times
Top Hong Kong builder saw weekend sales frenzy
[HONG KONG] Hong Kong's biggest property developer Sun Hung Kai Properties sold another 376 flats on Sunday (May 18) after receiving more than 34,000 bids, becoming one of the most sought after projects in months thanks to low interest rates. The new round of sales at Sun Hung Kai's Sierra Sea in the Ma On Shan area comes days after a quick sellout of its first batch earlier last week. The flats sold at about HK$9,645 (S$1,601) to HK$13,500 per square feet. A drop in interest rates is helping the city's residential market. The one-month Hong Kong Interbank Offered Rate, or Hibor, which often serves as a reference rate for mortgages, dipped below 1.3 per cent, the lowest since August 2022. 'The one-month Hibor's plunge could push mortgage rates further below residential rental yields and reignite investment interest in Hong Kong's housing market,' Bloomberg Intelligence analysts Patrick Wong and John Wong wrote in a note on Friday. They also expect monthly new-home sales in the Asia financial hub to jump by 36 per cent from 1,100 units in April. The company sold all 160 units in the 1B phase of the same residential development within hours on Wednesday. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up Home value for secondary transactions slightly edged up as borrowing costs lowered. Centaline Property Centa-City Leading Index, a gauge for second-hand home prices, climbed by about 0.26 per cent in the week to May 11. Any further advancement in the secondary market will depend on whether the US Federal Reserve cuts rates in June, said Willy Liu, chief executive officer of Ricacorp Properties. Lower interest rates are helping increase the chances of Hong Kong's residential property market bottoming out, according to Jefferies Financial Group. Justin Chiu, executive director of CK Asset Holdings, said Hong Kong's property market is at a 'turning point', and he expects property prices in the city to rise, according to an interview with local media on Monday. The city's home prices are 29 per cent below their peak in 2021, data from the government show. The number of households with negative equity – when the value of a property is less than the outstanding mortgage loan – rose to the highest since 2003 as at the end of March. BLOOMBERG
