The Real Estate Exodus in Hong Kong

As tensions escalate in the US-China tariff war, Hong Kong's property investors are taking a hit like never before, hastily dumping assets at staggering losses. This turmoil comes on the heels of an already fragile market struggling to bounce back from years of hardship.

Significant Losses for Bridgeway Prime Shop Fund

In a telling move, the Bridgeway Prime Shop Fund Management has just sold a shop at One Eighty in Shau Kei Wan for HK$20.1 million—a whopping 20% loss compared to their purchase price of HK$25 million per lot back in July 2023. Founder Edwin Lee emphasized the severity of the situation by stating, "We can't just sit on our assets while the market keeps spiraling down."

The Impact of Increased Tariffs

On Wednesday, US President Donald Trump declared a 90-day freeze on higher tariffs for most partners—except Hong Kong and mainland China—while increasing tariff rates on Chinese imports to an astonishing 125%. In retaliation, Beijing has ramped up its levies on US goods to 84%, intensifying the economic stir.

Commercial Real Estate Facing Dark Days

Recent sales reveal a grim scenario: Bridgeway also offloaded another property on Woosung Street for HK$18.7 million, incurring a 30% loss from their original investment of HK$27.5 million three years ago. With retail sales plummeting and interest rates soaring, the commercial real estate sector is in for a tough ride. Lee speculates, however, that retail shops could perform better than office spaces, thanks to a potential revival in consumer spending.

High-Profile Investors Join the Sell-Off

Not just small investors—the high-profile Patrick Kwok Ho-Chuen, an heir of the famous SaSa International cosmetics chain, is also feeling the pressure. He’s putting a residential site on Chung Hom Kok Road up for sale at HK$250 million, reflecting a staggering 24% drop from its purchase price of HK$330 million in 2021. This site holds significant promise for development, potentially allowing a luxurious three-storey home.

Conclusion: Turbulent Times Ahead for Hong Kong Property

The road ahead for Hong Kong's real estate market looks troubled, with investors now scrambling to divest assets in the face of an uncertain economic landscape. As the tariff war rages on, many are left questioning the future of property values and investment confidence in this once-booming market.