Well, even at its lithest, Hong Kong’s property market can’t keep defying the immutable laws of physics.
So, as the saying goes, what goes up must come down.
Consider Russell Street, a core retail corridor in Causeway Bay.
Most shops there have seen their rent tumble nearly 50 percent from last year thanks to fewer visitors from mainland China.
The latest transaction had jewelry and fashion retailer Folli Follie paying HK$9.96 million (US$1.28 million) a year for 60 Russell Street, previously rented out to long-term tenant Rado Watch for HK$19.2 million.
It was a substantial fall, although still higher than the HK$7.62 million rateable value of the property three years ago.
Rateable value is an estimate of the annual rental value of a property at a particular date.
It assumes that the property is vacant and will be let annually, with the tenant paying all rates and taxes.
By comparison, Sheung Shui’s infamous pharmacy shop street has been more resilient.
San Hong Street and its environs have seen a 10 percent increase in monthly rent — about HK$2.7 million to HK$2.9 million — despite Shenzhen’s decision last year to scrap multiple visit permits for its medicine-hunting residents.
Residential properties in small border districts have posted rental growth but not in upscale areas.
A 140 square-foot flat in Fung Tak Estate in Diamond Hill has seen its rateable value slip 7 percent to HK$25,560 this year.
Comparable public housing units are down between 5 percent and 7 percent.
By contrast, The Arch in the pricey Kowloon Station development, is up just 2 percent in rateable value, although it still checks in at about HK$1.7 million.
Interestingly, not all tycoons are getting equal treatment.
Li Ka-shing’s 79 Deep Water Bay Road home has a rateable value of HK$9.39 million, unchanged from last year.
Neighbors Cheng Yu-tung and Stanley Ho are a far second and third at HK$4.76 million and HK$4.4 million, respectively.
But Henderson Land supremo Lee Shau-kee is up 3.9 percent this year, with his 36 Macdonnell Road duplex where the entire family lives weighing in at HK$6.35 million.
These numbers are peanuts to them but it’s the price of entry to a rarefied circle an average person can only dream of.
Some numbers, however, are even lower.
For example, Alibaba founder Jack Ma’s Branksome Crest duplex in Mid-Levels is down 5 percent to HK$4.84 million, or about 10 percent lower than the purchase price in 2014.
But that was when the renminbi was falling, so arguably, the new owner of the South China Morning Post suffered no loss.
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