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Luxury house loss
Local retail giantJapan TownFounder Liu Bohui once again fell into the dilemma of luxury home investment and recently sold his Mid-Levels East home for HK$52 millionShiu Fai TerraceRoom B on the middle floor of No. 6, which includes a parking space, has suffered a loss of HK$33.785 million compared to the purchase price 13 years ago, with nearly 40% of assets evaporated on the books, making it one of the most striking loss cases in the luxury housing market after the epidemic.
Transaction details decrypted
The property has a saleable area of 2,805 square feet (approximately 260 square meters) and is a rare four-bedroom, two-suite layout. According to the Land Registry:
- Purchase price in 2011: HK$85.785 million
- 2024 transaction price: HK$52 million
- Book loss: HK$33.785 million (39.4%)
- Price per square foot: HK$18,538 (about HK$251,000 lower than new properties in the same area)
It is worth noting that this is Liu Baihui’s second major real estate investment failure in three years after he lost the duplex unit in Minghui Garden at 45 Repulse Bay Road for HK$75 million in 2022 (a loss of HK$13 million).
Market chain reaction
At the same time, another heavyweight silver owner’s property was put on the market for sale: a four-bedroom luxury house with a parking space in Clovelly Court, Mid-Levels Central, owned by the family of Shenzhen Cheung Kei Group Chairman Chen Hongtian, was put on the market by a silver owner for HK$68.25 million. The group has been facing financial pressure in recent years, and several Hong Kong properties have been taken over in 2023.
Experts interpret market trends
- High interest rates continue: current mortgage rates have soared more than three times compared to when the property was purchased in 2011, and the cost of holding the property has doubled
- The phenomenon of the ebb of northbound funds: In the past, mainland buyers accounted for 40% of the luxury housing market, but now it has shrunk to less than 15%
- Asset reconfiguration: Some business owners choose to stop losses and cash out to cope with the economic winter
Pivot
According to the latest report from the Rating and Valuation Department:
- Luxury home price index in Q1 2024: down 28.7% from the peak in 2021
- Silver main plate inventory: surged 4.2 times to 187 compared with 2020
- Number of transactions exceeding HK$100 million: Only 9 transactions were recorded in the first quarter, a new low since 2009
Industry insiders revealed that the current luxury housing market has formed a "frozen spiral": owners would rather bear huge losses than cash out, but buyers are mostly taking a wait-and-see attitude. It is expected that more news of celebrities reducing their property holdings will be exposed in the second quarter.
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