Super-rich losing millions as some Hong Kong trophy homes sell at painful discounts

In recent months, Hong Kong has witnessed a series of cut-price deals for super-luxury homes, as financially strained owners reluctantly accept significant losses to exit the market, despite ongoing demand for high-end properties. One such example is the sale of a Bel-Air luxury house for HK$138 million (US$17.6 million), roughly HK$37 million less than the HK$175 million the former owner paid in 2018.

Shie Thomas, the original buyer, is reportedly connected to the Hong Kong export firm Tak Fi International and is also recognized as a racehorse owner by the Hong Kong Jockey Club. The sale of the 3,792 sq ft property in Pok Fu Lam was finalized in June between the new owner, Shie Serena She-wing, and a buyer named Chen Dongqiong, resulting in a loss of over 20 percent on the 2018 purchase price.

Other high-end houses and flats have also changed hands well below their acquisition prices, indicating that a luxury home sales revival in Hong Kong has not entirely helped owners recover their equity. The Morgan, a 4,000 sq ft residence with a private terrace located on Conduit Road, sold for HK$190 million, which is 45 percent less than the HK$344 million paid by its previous owner in 2018. The sale agreement was signed on August 3, 2023.

In June, an 8,855 sq ft duplex situated at Mount Nicholson was sold for approximately HK$550 million, a 7.3 percent decrease from the HK$593 million paid by the seller in 2017. The seller, Chen Jiarong, is associated with the Shenzhen developer Kingkey Group. However, there seems to be a decline in the number of bank-owned luxury homes selling at a loss this year, according to Glen Ho, Deloitte's national turnaround and restructuring leader.

The Hong Kong residential property market has generally been more stable than the commercial sector, with a higher number of buyers returning in the first half of the year, which has reduced pressure on banks to dispose of properties quickly. Ho also mentioned that some residential assets may be handled more discreetly due to unauthorised building works.

Despite the overall slowdown in Hong Kong's luxury property market in the second half of the year due to external headwinds like Chinese tax changes and tighter capital controls, high-profile transactions continue to occur in sought-after developments. In August, CK Asset's 21 Borrett Road and K&K Property's One Stanley recorded significant transactions, with prices still commanding nine-figure values.