How to burn $6m in 10 days in Hong Kong's housing market

HONG KONG • A mystery buyer has forfeited a HK$36 million (S$6.2 million) deposit after walking away from plans to buy a home in Hong Kong's most prestigious neighbourhood.

The unidentified buyer walked away from the transaction for the three-bedroom house in Mount Nicholson on the Peak just 10 days after agreeing to buy it for HK$722 million on Dec 31, according to a government document.

A house in the same development last year sold for almost HK$1.4 billion, making it Asia's most expensive property on a per-sq-ft basis.

Since then, an almost 15-year bull run that made Hong Kong infamous for having the world's least affordable property market has petered out. Fallout from the US-China trade war, rising borrowing costs and a volatile stock market have weighed on home prices, which are down about 8 per cent from their August peak.

  • $124m

  • Cost of the Mount Nicholson house .

  • $6.2m

  • Deposit the buyer forfeited 10 days after committing to buying the property.

The slump may worsen, with Capital Economics expecting home prices to fall about 30 per cent over the next five years, including a 15 per cent slump this year, according to a note published on Thursday.

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A version of this article appeared in the print edition of The Straits Times on January 12, 2019, with the headline 'How to burn $6m in 10 days in HK's housing market'. Print Edition | Subscribe