Joseph Lau Luen-hung, a property magnate and one of Hong Kong’s wealthiest men, said high interest rates are forcing businesspeople to recalculate their investments and potential returns.
Lau held an impromptu press conference on Friday afternoon to respond to market rumours of a massive investment loss in embattled China Evergrande Group, his will and distribution of assets among his family.
“Whether it’s selling fish balls or [investing in] real restate”, it should only be done if there is a profit, Lau said.
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China real estate woes: Evergrande files for bankruptcy protection in New York
China real estate woes: Evergrande files for bankruptcy protection in New York
But he stressed that he would not dare to buy property now. “It’s better to hold on to the money now”.
Shares of Chinese Estates jumped as much as 19 per cent, the largest gain since August 3, before trimming the gains to 9 per cent to end the day at HK$1.69.
Lau, the eighth richest person in Hong Kong with a US$13.1 billion fortune according to Forbes, responded to rumours on the losses on his previous investment in Evergrande, saying the investment decision was made solely by him.
The former chairman of Chinese Estates is a close friend of Hui Ka-yan, the founder and chairman of Evergrande. Chinese Estates in 2021 disposed more than 630 million shares in China Evergrande, resulting in a loss of HK$7.9 billion as the stock tanked.
Chinese Estates in August reported a profit of HK$147 million (US$18.8 million) for the first half of 2023, according to its interim report, a year-on-year decline of 83.2 per cent. The company did not announce any interim dividend.
Lau said everyone in Hong Kong is seeking to protect themselves under the current economic environment. If the high interest rates remain for two or three years, “many large companies will not be able to operate well”.
“Everyone including me is taking a wait-and-see attitude. If the government does not take more proactive measures, it will not be easy to save the property market from collapse.”
Hong Kong home prices may fall by 5% as 7 banks set to raise mortgage rates
Hong Kong home prices may fall by 5% as 7 banks set to raise mortgage rates
Hong Kong has revised down its full-year growth forecast to 3.2 per cent, warning that a worsening external environment, rising geopolitical tensions and high interest rates will continue to pose challenges.
Centaline Property Agency was appointed to market houses A and D at 31 Barker Road. The three-storey detached houses in Hong Kong’s most exclusive residential neighbourhood enjoy a full Victoria Harbour view.
Outside Hong Kong, Chinese Estates owns several residential and retail projects in and around London, such as 120 Fleet Street, 14 St George Street, 11-14 Soho Street, 11 and 12 St James’s Square and 14-17 Ormond Yard.