Hong Kong’s property sales agencies report their worst financial results in years amid triple whammy industry slump

Midland Holdings reported a blowout 2019 loss of HK$68.92 million that was more than double its forecast, while its non-residential property sibling Midland IC&I posted a HK$19.5 million loss

At the privately owned Centaline Property Agency, net profit fell 38 per cent last year to HK$388 million

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People wearing protective masks walking past a shuttered shop in Causeway Bay on March 16, 2020, following the outbreak of the new coronavirus. Photo: Sam Tsang

Published: 7:44pm, 27 Mar 2020Updated: 10:21pm, 27 Mar 2020

Hong Kong’s property agencies are reporting their worst financial results in years, as the coronavirus pandemic added to the woes of an industry that was already slumping from many months of anti-government protests and an unrelenting US-China trade war.

Midland Holdings, the city’s largest publicly listed network of sales agents, reported a blowout 2019 loss of HK$68.92 million that was more than double its forecast, while its non-residential property sibling Midland IC&I posted a HK$19.5 million loss. At the privately owned Centaline Property Agency, net profit fell 38 per cent last year to HK$388 million due to the double whammy effect of the protests and the trade war on its Hong Kong business.

“Coupled with volatility in the stock and bond markets, home prices will be dragged down,” said Midland’s chairman Freddie Wong in a statement. “The number of negative equity cases and losses in transactions will increase. Unemployment rate … will continue to rise,” amounting to a “warning sound for the economic outlook” of the city, he said.

The downbeat numbers show how Hong Kong’s property industry is buckling during the city’s first recession in a decade. The city’s property agents are bracing for the long haul as a shrinking market with plunging prices has dented their take-home pay, forcing some of them to quit the industry.

Panicking homeowners had been dumping their property at losses, with at least 27 homes changing hands this month at less than their purchase cost, compared with 10 in January.

Three villas at the Valais community developed by Sun Hung Kai Properties (SHKP) in Sheung Shui sold for massive losses. A 1,841 sq ft villa sold for HK$20.8 million, 15 per cent discount to prevailing prices and a loss of HK$9.54 million, or 31.4 per cent, from its purchase price a decade ago.