The real estate crisis in Hong Kong is leaving deep marks on the finances of the city’s wealthy families. The sale of luxury properties at increasing losses reflects the economic turmoil affecting both owners and the local real estate market.
In the last month, an indebted family liquidated seven properties in the prestigious Peak district for an impressive €230 million, including sales with significant discounts, reports Bloomberg. The same source reveals that in April, a family-owned business sold its stake in the AIA Central building, accumulating a loss of €18 million. Another prominent retail clan also faced difficulties, selling a store at a 60% loss and facing the seizure of other properties by court administrators.
Data from CBRE Group Inc. indicates that about 75% of high-value real estate transactions — over €9 million each — in the first half of this year were made by sellers in financial distress.
The real estate market in Hong Kong is facing a continuous decline, exacerbated by China’s economic slowdown, high interest rates, and declining property values.
With the prospect of more families facing financial challenges, the pressure on Hong Kong’s real estate market may intensify further. High interest rates and the lack of a rapid recovery in the Chinese economy are causing many owners to consider selling their properties as a necessary solution to confront the crisis.