In March, Tse leased out a retail space in Central Hong Kong for HK$60,000 (US$7,721) per month, 40% below the original listed price of HK$100,000, after the unit sat vacant for more than a year.
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Hong Kong actor Nicholas Tse. Photo from Instagram |
Similarly, a property at the city’s Tsim Sha Tsui shopping district owned by the family of Stanley Ho, the “King of Gambling” who passed away in 2020 with a net worth of $14.9 billion, was listed for sale at HK$88 million.
“It is very rare to see such a prime development site in the heart of Tsim Sha Tsui for sale,” said Reeves Yan, head of capital markets at property consultancy CBRE Hong Kong—the exclusive agent handling the sale.
A few months before that, Hong Kong actor Chow Yun Fat had slashed the listing price of his mansion on The Peak, the city’s most exclusive neighborhood, by HK$25 million to HK$195 million. The property, named “Sunshine Garden,” is among the most valuable in Chow’s portfolio and was purchased at HK$128 million.
Just last week, a high-end duplex apartment once owned by Zhao and her former husband also struggled to attract interest. The property went to auction at HK$49 million, a steep 32% markdown from its purchase price of HK$72 million, but failed to draw any bids.
Hong Kong real estate has long been a favored investment among the entertainment elite and tycoons in China but difficulties in the market have driven down prices.
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Chinese actress Vicki Zhao. Photo from Zhao’s Weibo |
In the housing segment, prices have plunged nearly 30% since their peak in 2021 in a downturn driven by higher mortgage rates, reduced demand after many professionals moved out of the city, and a weak economic outlook, according to Reuters.
According to the city’s Rating and Valuation Department, private home prices decreased by 0.5% in March after a revised 0.6% drop in February, marking the fourth straight month of decline.
Particularly, prices in the secondary market slipped a cumulative 1.7% in the first quarter of this year, pushing the index to its lowest since July 2016.
The office and retail segments have also remained sluggish, with the value of transactions falling for four consecutive years since 2021, as reported by Nikkei Asia.
Deals in the sector slid 7% to HK$ 64 billion last year, the lowest since the SARS outbreak in 2003, according to real estate agency Centaline Commercial.
Persistently weak retail sales have dampened rental prospects. In March, the city’s retail sales dropped for the 13th straight month to HK$30.1 billion, down 3.5% from a year earlier. The contraction eased from a 13% fall in February.
An index tracking private retail property prices compiled by the rating department was at 380 in December, well below its peak of 601 in November 2018, when the market was thriving.
But amid the prolonged downturn, fresh capital from Southeast Asian firms and local education institutions has offered a glimmer of hope for the commercial real estate sector, the South China Morning Post reported.
These two groups each made up around 22% of the HK$6.28 billion invested in Hong Kong property in the first quarter, according to property consultancy Colliers. The influx has also helped lift leasing activity.
Thomas Chak, head of capital markets and investment services at Colliers Hong Kong, explained that the influx of capital seeks to capitalize on the recent slump, with lower prices making prime properties appealing to investors.
This influx is also partly fueled by the “Studying in Hong Kong” scheme, introduced last October as part of the city’s efforts to establish itself as an international hub for post-secondary education.
“Many investors have faith in Hong Kong that it will rebound and it will remain the financial hub of Asia,” Chak noted.
And there might be hope for celebrity-linked Hong Kong luxury homes as well, as the segment has seen an uptick in sales this year, driven by plunging prices and expectations of further interest-rate cuts and an improving stock market.
“This highlights a persistent appetite for high-end properties among affluent buyers, particularly as confidence in the market begins to stabilise,” said Lucia Leung, director of research and consultancy for Greater China at Knight Frank.
With continued high demand, these luxury bargains are unlikely to last. Knight Frank anticipates a 3% increase in luxury home prices this year.
Victoria Allan, founder and managing director of Habitat Property, said: “We will see some distressed vendors looking to exit quickly. But as this stock is sold, supply will tighten and values will firm.”
