Staff reporter and Bloomberg
A luxury house at 28 Peak Road, owned by a local family, reportedly sold for over HK$1 billion at around HK$112,000 per square foot, marking the largest high-end property transaction since the rate cut.
The property spans 16,700 square feet, featuring a large garden, pool and a villa with a usable area of about 8,910 square feet.
It includes a basement with a garage and helper's quarters, a ground floor with living and dining areas, a kitchen, a guest suite and the first floor has six en-suite bedrooms.
The family bought the villa for HK$154 million in May 2002 through South Hill (Hong Kong). If the deal goes through, they would see a paper gain of about HK$846 million, with the property's value increasing 5.5 times.
The family sold four villas on Plantation Road for HK$1.1 billion in early July, then sold another three on Peak Road for HK$828 million, totaling nearly HK$3 billion.
In the residential sector alone, about 75 percent of high-end property transactions - those worth more than US$10 million (HK$78 million) each - in the first half involved financially stressed sellers, according to data from CBRE.
"There have been big changes because for the past 15 years, family owners didn't bother to sell," said Reeves Yan, head of capital markets at CBRE Hong Kong.
Mansions were usually only sold by developers, he said. "But now there are a lot of family owners selling because they are under pressure."
Other families in trouble include that of the late retail magnate Tang Shing-bor, who has been looking to sell real estate worth billions of dollars since 2020. This year, buyers seized at least eight properties owned by the Tangs, including a mall and a hotel, and the family sold a shopfront at a 60 percent loss in May, according to local media reports.
The son, Tang Yiu-sing, and others were sued by a creditor in July for more than HK$1.1 million in outstanding loan payments, a court filing shows.
Lai Sun Development, controlled by the family of late industrialist tycoon Lim Por-yen, has been selling properties from residential to retail and commercial.
In April, the group offloaded a 10 percent stake in the AIA Central office at a loss of about HK$154.6 million. The net proceeds were to be used to repay bank loans and provide working capital.
ITC Properties, founded by Charles Chan Kwok-keung, former chairman of Hong Kong's Television Broadcasts, sold the 30th floor at the Bank of America Tower to repay a loan, it said in an exchange filing in April. The office space went at a HK$4 million loss.
A representative for ITC Properties declined to comment. Lai Sun didn't reply to emailed requests for comment. A representative for Stan Group, which is led by Tang, didn't reply to a request for comment.
For mansion sales, buyers are typically high-net-worth individuals looking for distressed sellers and deep discounts, according to brokers. This includes mainland Chinese, who have been party to some of Hong Kong's biggest transactions this year.
More families are likely to offload properties this year as the US Federal Reserve is in no hurry to cut rates, said CBRE's Yan.
That means homeowners could face borrowing rates of more than 5 percent, higher than the city's typical rental yield of 3 percent.
"If this situation drags on longer, more and more owners will face difficulties," said CBRE's Yan. "Some may default on their interests, get into cash flow problems and be forced to sell their property."
