Hong Kong’s third-richest man, Lui Che-woo, joins chorus of warnings about property market
Lui tells buyers to get something to live in, not for speculation, which ‘is just like gambling’
Hong Kong’s third-richest man has a word of warning for property buyers in the world’s least affordable city to own a home: by all means get something to live in, but do not be sucked into speculation.
Lui Che-woo, chairman of developer K Wah International Holdings, said on Wednesday that the US-China trade war and the Hong Kong government’s policy aimed at curbing prices would cause a lot of uncertainty.
“It is fine to buy a home for self use. But for speculation, it is just like gambling when Hong Kong home prices surge to the world’s most expensive,” he said.
He was speaking after K Wah reported that underlying profit plunged 98 per cent to HK$32 million (US$4.1 million) for the six months ended June 30, after a change in accounting policy meant that it was unable to book sales from uncompleted properties in the period. Instead, it said agreed sales of unfinished properties worth a record HK$18.5 billion would be accounted for in the next 24 months.
Net profit, including revaluation gains on investment properties, declined 73 per cent to HK$578 million, while revenue plunged 87 per cent to HK$623 million.
The company declared an interim dividend of 6 HK cents per share, up 20 per cent year on year.
Lui’s comments on the property market were the latest to point to difficult times ahead. This week, investment bank CLSA said prices would drop 15 per cent over the next 12 months in the face of rising interest rates, a slowing economy and depreciating yuan.