Why Hong Kong's Rich Are Selling Their Dwellings

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Transcript

00:00Electricity prices are coming down, are going up, are going up.

00:04Oil prices are going down.

00:05The high bar is coming down.

00:07Well, that's true.

00:07That's true.

00:08So I think it's an offset in terms of the household bill, right?

00:10And what is that doing for the property market?

00:13Well, you have rich families when you look at the housing prices at the very, very, very top of the segment here.

00:18They're being forced to sell their homes, to cut debts and meet obligations as they grapple with all the market volatility out there.

00:26Let's bring in Venus Fung, our Asia investing reporter, to tell us exactly what's going on with the very poor, rich families out there.

00:34Hi, David and Yvonne.

00:36So, yeah, we know that Hong Kong property has been in the downturns for several years.

00:41And then now, more recently, we are seeing the distress scene to a new level.

00:45For one of the most high-profile case this week is Chen Ping-chi.

00:50He has a nickname here known as the King of Kessets.

00:53That's how he makes his early fortunes.

00:55And he's a very experienced real estate investor as well.

00:59He was part of the center deal with Lee Ka-shing, then taking up most of the force of skyscrapers in Hong Kong.

01:07But we saw this week that his Seville Villa has been listed for sale in the markets by a bank because he defaulted in a loan.

01:18So, I mean, you've been covering a lot of these kind of mansion fire sales, right?

01:23I mean, how much do you think selling these homes help for them?

01:26What does this tell us?

01:27So, yeah, to some extent, it kind of shows, because we heard a lot of Hong Kong's high boat has been punching,

01:34and it's actually helping the sentiment in the residential side.

01:37So, analysts would expect maybe if you're offloading a home, a luxury home, and a prime A office floors at the same time,

01:48it's actually you can sell faster for the residential side because your home would be maybe like recoup cash,

01:54help you to recoup cash faster because, like, we see stronger talents and population inflow from the talent schemes

02:01and also the investment migration schemes.

02:06But on the other side, the office and retail, we are still expecting the rent to jobs and vacancy rates to grow.

02:15Tell us more about, I think it's interesting, the story of the king of cassettes, right?

02:20So, how big of a discount are we seeing in the luxury market?

02:24So, how much are they needing, they're leaving on the table because they have to sell?

02:28So, yeah, because, like, actually he bought the home from the 1980s, and his family has been living in there.

02:35So, apparently now that the home, he has to move out, and then because, like, the home needs to be sold.

02:43So, he bought at a very low price, but the asking price is lower than, like, the market level.

02:49So, the market price is about 4, it's asking about 430 million Hong Kong dollars, about 15 million U.S. dollars.

02:58And then he needs to pay the debts about 330 million.

03:02So, and that's, like, the kind of the price that they are looking for the buyers.

03:07So, when I was looking for the buyers.