Schadenfreude special

Hong Kong is becoming Asia’s ‘mansions firesales’ hub. Bloomberg reports that billionaires in the city are selling their luxury homes…

This week, a sea-view villa previously owned by wealthy businessman Chan Ping Che was listed by receivers for HK$430 million ($55 million). Meanwhile investment firm Gale Well Group Ltd.’s Chief Executive Officer Jacinto Tong sold his penthouse apartment for HK$138 million last month, according to land registry filings.

Chan, known as Hong Kong’s “King of Cassettes” for the source of his fortune, defaulted on a loan worth about HK$350 million in principal and interest from Fubon Bank Hong Kong Ltd. earlier this year, he said in a phone interview on Wednesday. Last month, receivers took over the mansion he and his family were living in since the 1980s.

So have they moved into a 450 sq ft place in City One Shatin? Sadly, the story omits this tantalizing detail. But it seems the billionaires assumed property prices would go up and up forever, and borrowed more than even they could manage…

“People often use leverage to purchase additional properties, amplifying returns when prices rise, but also magnifying losses when prices drop,” said Christopher So, a partner at PricewaterhouseCoopers LLP in Hong Kong. “As the market weakens, rental demand and yields also decrease, impacting cash flow for servicing debt and leading to rising rate of default.”

Or in plain English: they were greedy assholes.

Luxury home transactions have been improving since the last quarter of 2024, but prices aren’t reflecting the sentiment due to a surplus of distressed assets, according to a Savills report in March.

Presumably, by ‘improving’ the author means ‘rising’. When you have a ‘surplus of distressed assets’ the prices are probably reflecting the sentiment all too well.

Independent (ie non-pro-government) media in Hong Kong face tax audits and demands. From HKFP – which is among them…

Head of the HK Journalists Association Selina Cheng said at a press conference that at least six news outlets … had been receiving government tax demands since November 2023 as part of Inland Revenue Department (IRD) inspections.

Meanwhile, a total of 20 individuals linked to the independent media industry are also facing similar probes and tax demands, Cheng said: “Journalists in Hong Kong do not have a very high income. Other than having to pay these claims of taxes, they also need to spend money, time and energy to prove in reverse that they were innocent.”

…Cheng faces an IRD probe into her salary tax dating back to 2017-18 when she was a reporter with local outlet HK01. The IRD also inspected Cheng’s parents’ salary taxes, profit taxes and rates.

“I was earning a monthly salary of HK$18,000 at that time and IRD assessed my taxable income [to be] HK$231,000. But recently, IRD said my taxable income was HK$631,000, and requested to tax me for the ‘underreported’ HK$400,000,” Cheng said, adding that the IRD did not provide evidence as to why it suspected there had been more taxable income.

The SCMP adds…

Last June, Secretary for Security Chris Tang Ping-keung called the [HKJA] an organisation “with no recognition” and accused it of standing with the “black-clad violent mob” during the 2019 anti-government unrest.

Speaking of HK01, the outlet carries an op-ed pointing out what most of us know from our own travels – that a city that’s nice for its own residents to live in is by definition attractive to tourists. 

…The success of [Tokyo, Bangkok, London, Istanbul, etc] is not only due to their “tourist hotspots”, but because their urban planning, living culture and core stories together create an atmosphere that makes tourists feel that they can not only sightsee and check in, but also “live” in them.

…tourists are eager to experience real daily life, taking trams and eating in tea restaurants. Therefore, a city must be livable in order to retain tourists. The “Hong Kong flavor” cannot be represented by one or two tourist hotspots, but rather the city’s lifestyle culture, operating model, and a temperament from the inside out.