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The rich second generation is a curse to its family wealth
2025-1-25
The Lunar New Year is approaching. On these joyful days for celebration, everyone wishes that the economy will be stabilized, property prices will stop falling and the unemployment rate will remain low. If these good wishes can be realized one by one, Hong Kong will regain the glory of its heyday.
Though wishes are intangible and unpredictable, it is really hard to achieve them smoothly. What Hong Kong facing now is not only economic transformation, but also a deeper adjustment of property prices. Indeed, more than 70% of Hong Kong's billionaires are relied on long-term rising of the property prices.
When the high land premium policy is no longer available. The effective strategy employed by developers is to buy lands at a low price and then sell the completed properties at a higher price, which is no longer profitable. As for investors, speculative trading cannot also be the golden key to gain profit. Even if the purchasing price is low, the investors are still likely to suffer heavy losses due to the sharp drop of property prices.
The rich second generation of property billionaires of Hong Kong continues the exaggerated expansion of the first generation of riches which they employed decades ago. Some of them want to become hotel giants, the others want to be the king or queen of  classic and grand shopping malls. In general, they employed highly leveraged lending, and their investment strategy was aggressive. As a result, their leveraged assets' valuation had fallen under their rock-bottom price in the past few years of economic downturn. At present, many of them are technically insolvency. Although part of the second generation do not like to show off their capabilities, they prefer to pursuit a comfortable life type and go goblin mode. Lack of persevering spirit, the consequences of the decline of their family fortune are already written on the wall.
In view of this situation, banks have been calling loans to mortgagors with heavy debts since last year. Three to five well-known riches who could not repay the debts had been bankrupt. Starting from 2025, banks have taken further actions against foreclosures crisis and will forcefully confiscate the mortgaged properties from the non-performing borrowers.
There are many mortgagors who are being called loans. Some renown landlords who are unable to repay their debts go goblin mode and have stopped paying the installments of the mortgaged properties. Therefore, more well-known real estate tycoons will be bankrupted after the Lunar new year holidays.
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1. InvestHK helped a record 539 non-local companies 2025-01-26 12:55:04 |
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The head of the government's investment promotion agency on Sunday said her office will focus on bringing in non-local companies that can "create a larger financial impact" in Hong Kong.
In the past year, InvestHK helped a record 539 non-local companies establish or expand in the SAR, with total investment reaching HK$67.7 billion.
"The companies we want to attract are from all industries... We want to put more focus on companies that would create more jobs, and to bring in more direct investments, and create a larger financial impact for Hong Kong," its director-general, Alpha Lau, said.
"A lot of these [companies] that we brought in... they are looking at the growth of the demographics and the wealth in the region, so they would want to invest more here." |
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2. Home prices fell 7.1 percent in 24 2025-01-27 14:54:54 |
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Home prices fell 7.1 percent in 2024, official figures showed on Friday.
It was the third year in a row of declining prices, which have dropped 27 percent since the start of 2022.
Eddie Kwok, executive director of CBRE Hong Kong’s valuation and advisory services, said price increases could be on the cards after Lunar New Year and the financial secretary's budget speech next month.
Kwok said major banks have lowered their prime rates since the US Federal Reserve's interest rate cut last September and since then prices have been stabilising. |
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3. Business is cautiously optimistic 2025-01-28 17:12:07 |
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Vendors were on the fence on Tuesday about how much revenue they would generate as people went to wet markets to buy food for their family reunion dinners.
Reunion dinner on Lunar New Year’s Eve is traditionally regarded as the most important meal of the year in Chinese culture.
One man said he spent over HK$1,000 shopping at the wet market.
“I picked up things like clams and shrimp. They are a little pricier this year, about 10 percent more than last year. But it’s New Year, so that’s expected,” he said.
A vegetable seller at Kowloon City Market said business was pretty rough overall, noting that lettuce was the only top seller because it symbolises the generation of wealth in Chinese. |
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