The former home of actor and singer Nicholas Tse in Hong Kong's Southern district recently sold for a loss of up to HK$14 million (US$1.8 million), casting a shadow over the city's luxury housing market.
The 2,583 sq ft house in The Redhill Peninsula was this week sold for HK$60 million, or HK$23,229 per square foot, according to agents. Its former owners bought the house for HK$70 million in 2012, according to Land Registry documents. When expenses such as stamp duties and commission are included, their loss on the property amounts to about HK$14 million, the biggest loss reported during a property transaction since the introduction of the national security law.
The selling price is also 11.8 per cent lower than the asking price of HK$68 million, according to the agents. It is also 25 per cent below the HK$80 million that a neighbouring house with the same area sold for in January 2019.
"The price is shocking," said Louis Ho, principal sales director at Centaline Property Agency. "The house had been on the market for some time. The owners probably did not want to wait " the price cut was large.
"It is more difficult to sell" as the house is relatively far from the city centre, Ho said. "When the national security law was revealed, coupled with social unrest, the market cooled down," he added.
Ho said the law had divided homeowners, with some looking to move away from Hong Kong and thus reducing their asking prices for property, while others felt more secure and were looking to invest.
"Some homeowners are in a rush because of the national security law. Some homeowners want to emigrate or cash in, and are more aggressive [in offering discounts]," Ho said.
The law was likely to encourage some to sell their properties, he said. Villas, particularly old ones, tended to see further downward pressure on prices. "Those who want to sell need to keep prices low," Ho said.
Others felt there was more stability now and felt more secure, Ho said. Low interest rates and quantitative easing were also encouraging some to upgrade their homes and speed up investment, he added.
"Several dozen potential buyers had visited the house in the past couple of weeks. There is no other house available at such a price," said Elton Leung, branch manager at Ricacorp Properties, adding that the cheapest home on offer in Redhill was a property measuring about 2,700 sq ft, and that it was going for HK$67 million.
He said some homeowners might accept discounts of 5 per cent to 10 per cent, and that "there might still be some transactions at losses [in the luxury housing market]".
Tse's father, actor Patrick Tse Yin, bought the house for HK$28 million in 1996 with Tse Brother's (Hong Kong) Company. The younger Tse became another director of the company in 1999. They sold it to Ho Tat Land Investment for HK$18 million in 2000, after the dotcom bubble burst.
Other celebrities who own homes in Redhill include singer and actress Charlene Choi and singer Joey Yung's mother.
Meanwhile, other developments have also reported losses in the secondary market. For instance, a villa measuring 2,031 sq ft sold for HK$23.5 million, representing a loss of about HK$6 million when expenses are included, in The Beverly Hills in Tai Po mid last month.
"Uncertainty in the residential market has been heightened, given the worsening labour market and deteriorating US-China relations," said Martin Wong, associate director for research and consultancy in Greater China at Knight Frank. "As house price movements usually follow economic and employment conditions, the adverse impact of contracting economic activity on the residential market could gradually emerge later this year."
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.
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