After the New Year, Hong Kong's economic environment remains challenging. The wave of bankruptcies in retail and catering sectors continues, and the vacancy rates for commercial and retail premises are still rising. Residential transaction volume has increased slightly, but transaction prices have not shown a significant rebound. The property investment market remains frozen. Last year, educational institutions completed the acquisition of several large commercial properties, allowing investors to cash out and exit.
This year, market sentiment may worsen. One Beford Place, a newly completed commercial building on Bedford Road owned by 
the Lofter Group, has recently been confiscated by a mortgaged bank. This incident proves that the commercial building market is facing a total meltdown.
As expected, more commercial properties owned by developers or investors will become foreclosed property later this year. At last, this new normal will cause some rich second generation to be declared bankruptcy. These hardworking and ambitious riches should have been able to carry on the legacy of the family businesses and help them thrive in the real estate industry. Unfortunately, the markets change far beyond expectation; they fall victim to the curse of "Wealth never survives two generations."
Born with a silver spoon in their mouths, the new generation of wealthy families often returned to Hong Kong to take over family business after completing overseas degree courses. To prove their capability, these rich second-generation developers often advocate massive investment projects. Shops commercial office rents and prices have been continuing to decline since 2020. The bigger the investments are, the harder they fall.
In general, ordinary entrepreneurs face tight funding in their initial stages; the rich second-generations have high self-esteem and rarely consider the source of funds. To gain support from both the company and public, they developed projects that were both massive and luxurious, often with excessively grand expectations of return on investment. When the market reversed, many projects were hard to achieve profitability.
Rich second-generation investors face similar situations. Their parents amassed wealth through property speculation; their next generation took over the business or established new investment companies, also focusing on speculation. The rich second-generation normally possesses property portfolios worth billions or even tens of billions of dollars. If the existing portfolio is will-managed, it could generate hundreds of millions in rental income annually. However, they found managing rental properties too troublesome, preferring to leave them vacant and waited for a decent price to sell rather than actively renting them out. To expand their investment portfolio, they continued to invest in properties through remortgages. As the market turned against them, both property rent and sales volume suffered heavy losses. Unless the market suddenly improves, the investment companies controlled by these rich second-generation are bound to face bankruptcy.
The rich second-generation in the real estate agency business was low-key and unambitious. They did not push for huge investments and were happy to support their parents' businesses during this property market downturn. Their semi-laid-back work attitude steered the companies to weather the storm safely.
