Real estate has always been at the centre of some of Hong Kong’s legendary rags-to-riches stories, but the number of mega-rich are drying up.
– broke into the list of the world’s top 10 richest people for the first time. A quarter-century later, that exclusive club no longer features anyone from the city, showing how the territory has failed to keep up with creating wealth.
Li and Lee, the nonagenarian moguls whose fortunes have grown since 1996, still lead Hong Kong’s wealthy, of whom almost 70 per cent own a real estate business. In another telling sign, almost the same developer families top the city’s rich list in 2022 as in 1997. Their average age is about 70, trailing only Italy and India, according to the Bloomberg Billionaires Index.
While all of Lee’s four predecessors have attempted to improve living standards, few proposals have been successful in a city notorious for its “cage” or “coffin” homes – 9.43sq m stacked bed spaces – and mansions that sell for more than $US110 million in upscale neighbourhoods. “Hong Kong’s real estate problem is the key factor behind worsening income inequality, but also the lack of innovation,” said Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis. “The government itself depends on revenue coming from land auctions, so it has no interest to see housing prices come down.”Li Ka-shing, 93, cemented his fortune with a series of well-timed property bets in the city, where he settled after fleeing the mainland as a World War II refugee in the 1940s.
Besides wealth, the tycoons have also accumulated significant political clout over the decades through their close ties to Beijing. As members of an electoral college, they help choose Hong Kong’s chief executive every few years.
But Hong Kong’s future transformation may need far more than one successful listing to catch up with Singapore.
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