Hong Kong Billionaire Li Ka-Shing Drops A Cool Billion Betting Against A Property Crash

Despite concerns about Hong Kong’s real estate prices, and the risk that they could crash, Hong Kong billionaire property tycoon Li Ka-Shing just bet a fresh $979 million on two sites.

He even paid what appears to be a premium:


Cheung Kong (Holdings) Ltd., controlled by Li, bought a property in the Ho Man Tin district for HK$4.1 billion ($530 million) and a plot in Hung Hom for HK$3.51 billion at a government auction yesterday. Both sites fetched more than the highest forecasts in a Bloomberg survey of seven analysts.

He’s doing this even in the face of government efforts to cool the property market. On August 13th the government raised down payment ratios for property buyers and said it would increase the supply of land. Prices have jumped 45% since the beginning of 2009.

Victor Li, 46, said after Cheung Kong’s earnings Aug. 5 that he doesn’t see a real estate bubble, while Li Ka-shing, 82, said Hong Kong property buyers will be all right if they are not overstretched.

The developer and Hutchison Whampoa had more than 40 million square feet (3.7 million square meters) in their land bank in the city, Victor Li said at the earnings briefing.

Li Ka-shing, who correctly forecast in 2007 that China’s stock market bubble would burst, said after the earnings that investors “need to prepare for what happens when interest rates rise.” Buyers shouldn’t borrow more than 70 per cent of a property’s value, he said.

Cheung Kong shares ended the day higher, despite Hong Kong and most of Asia declining. See more on this via The First Look here.

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