If you’re going to buy a house in Hong Kong, live in it, warns tycoon Li Ka-shing as he forecasts global slowdown

If you’re going to buy a house in Hong Kong, live in it, warns tycoon Li Ka-shing as he forecasts global slowdown
Li Ka-shing meets the media before the Cheung Kong Group annual dinner at the Hong Kong Convention and Exhibition Centre in Wan Chai.
PHOTO: South China Morning Post

Hong Kong’s richest man, Li Ka-shing, said on Friday that the world faces slower economic growth and warned against speculation in the city’s property market.

“This year, the world economy will probably be very complicated. Everyone should be cautious,” said Li, who retired last year, aged 90, as chairman of CK Asset Holdings and CK Hutchison Group.

“In my own opinion, this year the world will face low GDP growth. I’m paying attention to the world economy because the group has businesses in 52 countries.”

He was speaking before the CK Group’s annual dinner in Wan Chai on Friday.

His son, Victor Li, who took over as chairman, said: “The rise of protectionism, the unceasing trade disputes, the Brexit uncertainties, the various national election outcomes, and the reappearance of rate hikes…all such issues have caused ripples in the global environment and to some extent our group’s businesses.”

Still, the company’s “deliberate strategy of increasing stable recurrent income” has borne fruit, and the group enjoys a very strong cash flow, he said.

Asked if he worried about Hong Kong’s economy, Li Ka-shing expressed confidence in the market outlook.

“I have been in Hong Kong since 1940. For all these years, Hong Kong has survived,” he said.

But he said Hong Kong’s homes would be “volatile”.

“It is fine if you can buy a house for your own use within your affordability. You should never buy it for speculation. [It is] a little volatile.”

Prices of Hong Kong’s lived-in homes have fallen 7.2 per cent in the past four months, according to data from the government’s Rating and Valuation Department. A 28-month rally ended in August, and some analysts forecast a drop of as much as a quarter this year.

Developers have been offering steep discounts at recent project launches to drum up sales. For instance, China Overseas Land & Investment offered units at the Regent development in Tai Po for 32 per cent lower than a nearby project launched five months ago.

Meanwhile, a buyer at Mount Nicholson on The Peak – Asia’s most expensive address – lost a US$4.6 million deposit after walking away from the purchase of a house worth HK$721.88 million (US$92 million) on Thursday.

CK Group has spent the last two years pursuing business opportunities worldwide.

Asked by a journalist if CK Asset would be more aggressive in Hong Kong’s property market, Li said the city has its own advantages.

“But there is some business we cannot pursue in the city, such as oil and energy.”

On Tuesday, CK Asset revealed its plans to convert a hotel in Tin Shui Wai into a dense housing project, with 5,000 flats.

The conglomerate submitted an application to the Town Planning Board to convert the 1,100 rooms at Harbour Plaza Resort City hotel into a residential project with up to 54 flats on each floor.

Despite the slower economic growth, he said he and his family have bought shares in the group without selling any.

For instance, the Li Ka Shing Foundation splashed out HK$166 million on 2.986 million shares of CK Asset, raising its stake in the company to 33.42 per cent on January 2 and 3 this year.

This article was first published in South China Morning Post.

Purchase this article for republication.

BRANDED CONTENT

SPONSORED CONTENT

Your daily good stuff - AsiaOne stories delivered straight to your inbox
By signing up, you agree to our Privacy policy and Terms and Conditions.