(Bloomberg) -- Hong Kong’s recent streak of distressed luxury property sales should persist through the rest of the year, helped by buyers flush with cash, according to Savills Plc brokers.
The market is “dominated” by cash-rich buyers who can step in right away to meet the financial needs of sellers and receivers, top executives from the real estate firm said at a media briefing in the city this week.
Hong Kong’s luxury residential market has seen a jump in the sale of homes by individuals who are under financial pressure. High interest rates and a stuttering economy have driven some family owners to offload their assets for as low as half the price before the pandemic, exacerbating the city’s housing slump.
An example is the sale of four mansions at 46 Plantation Road, which was brokered by Savills. The buyer paid HK$1.1 billion ($141 million) in cash. The houses were among several assets that the seller, the Ho Shung Pun family, had pledged for $350 million in loans.
“Liquidity is really low, so all our buyers are cash buyers,” Raymond Lee, Savills’ greater China chief executive, said at the briefing.
Lee and his team have been involved in many of Hong Kong’s major transactions this year. In addition to 46 Plantation Road, they include a house that once belonged to China Evergrande Group Chairman Hui Ka Yan, and a property at the Peak that sold for HK$838 million.
Values of townhouses have declined by around 30% in the past five years, and the transacted prices of super-luxury homes are around 50% below the pre-pandemic peak, the firm said.
“In the last 30 years, most people who got rich did so through real estate,” said Lee, stressing that the expansion was fueled by cheap credit. “The bubble eventually burst.”
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