Recent reports indicate that office buildings and shops are being sold at significantly reduced prices, the sellers were often incurred by the shortage cash flow issues in their companies. Those sellers, many of whom have owned their properties for years, are cutting prices by 50% to 60% for their listings due to poor market conditions, resulting in a lot of profitable properties turning into substantial losses’ transactions.
As the saying goes, " It would be an enormity if you do not take profits whenever the deals are profitable." This saying has a simple meaning but is full of wisdom. In fact, the investment market is highly volatile, and the irregular movement of the stock market was a matter of routine. In the past few years, the price per square foot (psf) of office space has plummeted by more than 50%. 
Many landlords were reluctant to cash in their properties at record high and quickly turned to be negative asset holders when the prices dropped rapidly.
The author knew an investor who bought an office unit in Tsim Sha Tsui East for HK$10 million six years ago. The price rose to HK$14 million at its peak. At present, it is hard to find a potential buyer even though the asking price was reduced to HK$6 million. Many investors have confronted the same situation recently. The highest transaction price of Far East Finance Center was HK$61,000 psf in 2018. In March of this year, the similar transactions price dropped to HK$16,000 psf, falling more than 73% from its peak. Therefore, the way to victory is to sell swiftly whenever the price is crazy high.
A group of aggressive shops & commercial property investors emerged in the past decade. They did not sell their investment properties at soaring prices. Inversely, they bought more when the transaction price is ultra-high. When the price dropped rapidly, their mortgaged properties had turned into negative value assets. The banks acted without hesitation to call their loans. The investors had no choice but to sell their properties at an extremely low price so that they could cash in quickly. Even so, many investors will go bankrupt finally.
In addition to selling commercial properties at rock-bottom prices, investors also had to sell off a large number of their luxury residences, resulting in a sharp drop in luxury home prices. Currently, banks are overly cautious about approving mortgages for investment properties. Even if the loan application is approved, the interest rate will be raised to more than 7%. In this condition, property sellers have no choice but to cut down their asking prices to draw the potential buyers’ attention.
