Core Viewpoint - The Hong Kong residential market has experienced significant losses, with a notable case of a luxury property selling for 790 million HKD, representing a 62.4% decline from its purchase price of 2.1 billion HKD in 2016 [2][3][5]. Property Transaction Details - The property at 15 Gough Hill Road was sold after two years of unsuccessful bidding, ultimately selling for 790 million HKD [2][7]. - The property was acquired in 2016 for 2.1 billion HKD, marking a peak price of approximately 22.74 million HKD per square foot [3][5]. - The property has a usable area of 18,000 square feet, with additional garden and parking space, but was in a state of neglect at the time of sale [3][8]. Market Trends - The overall luxury market in Hong Kong has declined by about 30% since its peak in 2021, with some properties experiencing declines of 35% to 40% [4]. - The specific case of the Gough Hill property reflects a combination of factors, including being a "bank sale" and a unique property situation, leading to an additional discount of 15% to 20% [4][9]. Financial Implications - The loss of 1.31 billion HKD on this property is unprecedented in the Hong Kong residential market [9]. - The pricing logic for luxury properties has shifted from "landmark premium" to "cash flow and risk discounting," indicating a change in buyer sentiment and market dynamics [9]. Owner's Financial Situation - The owner, Chen Hongtian, has seen a significant reduction in personal assets, with total investments in Hong Kong properties amounting to approximately 6.987 billion HKD since 2015 [11][14]. - Other properties owned by Chen have also seen substantial declines in value, with some properties selling for significantly less than their purchase prices [13][14]. Broader Market Context - The case serves as a warning regarding the leverage model in real estate investments, particularly during periods of rising interest rates and declining asset values [18]. - The financial struggles of Chen's investments are mirrored by the broader challenges faced by the Hong Kong real estate market, emphasizing the need for reduced leverage and better risk management strategies [18].

Core Viewpoint - The Hong Kong luxury residential market has experienced significant losses, with a notable case of a property sold for HKD 790 million, down from a purchase price of HKD 2.1 billion, reflecting a depreciation of HKD 1.31 billion or 62.4% [2][3] Group 1: Property Transaction Details - The property at 15 Gough Hill Road was acquired in 2016 for HKD 2.1 billion, setting a record price per square foot of HKD 227,400, which was a benchmark for luxury properties globally [3] - The property, with a usable area of 18,000 square feet and additional garden and parking space, was sold after two years of unsuccessful bidding and financial issues leading to its takeover by East Asia Bank [2][3] - The sale price of HKD 790 million represents a significant loss, exceeding the HKD 1 billion loss from another luxury property transaction in Kowloon [3] Group 2: Market Trends and Analysis - The overall luxury market in Hong Kong has declined approximately 30% since its peak in 2021, with some properties experiencing declines of 35% to 40%, and an additional discount of 15% to 20% for bank-owned properties [2][5] - The pricing logic for luxury properties has shifted from "landmark premium" to "cash flow and risk discount," indicating a change in buyer sentiment and market dynamics [5] - The luxury market is expected to remain at the bottom even if the government removes certain market restrictions in 2024 [5] Group 3: Financial Implications for Investors - Chen Hongtian, the chairman of Xiangqi Group, has seen a significant reduction in personal assets, with total investments in Hong Kong properties amounting to approximately HKD 6.987 billion since 2015 [6][9] - The financial struggles of Chen's investments are highlighted by the sale of multiple properties at substantial losses, indicating a broader trend of asset depreciation in the luxury market [9][11] - The case serves as a warning about the risks associated with high leverage in real estate investments, particularly in a declining market [13]