It's been a tough 2024 for Hong Kong's richest residents, amid a confluence of liquidity strains, lofty interest rates and a slowing economy. Consequently, many have been compelled to divest their properties at steep losses, the South China Morning Post reported.

For example, the chairman of the mainland developer Agile Group, Chen Zhuolin. A staggering US$16 million went up in smoke after he sold nine flats he owned in Kowloon Tong's Hamburg Villa at discounts of up to 63 per cent.

These units, which were originally valued at HK$213 million ($27.3 million), were offloaded at barely half of what they were worth just six years ago.

Individual investors aren't the only ones feeling the pinch - the entire property market has taken a severe beating as the price for office and retail real estate fell by up to 70 percent from their peak.

Fallout from that has sent reverberations across the industry and taken the shine off mainland real estate big shots and local families of Ho Shung-pun, Tang Shing-bor and Chen Hongtian, among others.

One of the most notable struggles is Agile Group. The Guangzhou-based company missed a payment on its $483 million bond in May and is now trying to refinance a HK$894 million loan with its Quarry Bay project as collateral.

Another example of a distressed sale is the office building One HarbourGate East Tower in Hung Hom, sold in November for HK$2.65 billion at a 41% loss from the price Cheung Kei Group paid for it back in 2016. The sale came about because Chen had a short-term cash flow problem and lost control of the asset. And then, of course, there's also the 9,200 sq ft house on The Peak, which Chen owned, seized by creditors, and which still sits on the market.

What to expect in 2025: Tom Ko, executive director at Cushman & Wakefield Hong Kong, is anticipating further distressed sales of commercial real estate. Even if interest rates do decline a notch, giving the market a mild push, the residential rates are just going to skewer downwards, and the financial pressures just keep mounting.

Distressed sales are climbing on the luxury residential side as well, particularly in hot spots like The Peak and Tai Tam, which have dropped at least 30% from their peaks. More than 100 homes were listed in The Peak in September, however, indicating a resurgence in financially distressed sellers. Among the most high-profile deals, a mansion at 10B Black's Link that was once owned by an Evergrande executive was sold for HK$448 million ($5.7 million), 44 percent lower than the HK$800 million it was appraised at just a few years ago. The Ho family also sold four mansions on The Peak at a 35% discount in July this year to repay debts. And that trend is likely to continue, with experts saying 2025 will see even more distressed property listings as homeowners struggle to refinance their high-interest loans.

Meanwhile, overall home prices in the residential market edged up in November for the second month in a row. But in absolute terms home prices still fell 6.55% in the first 11 months of 2024, and are down a bruising 27% from their all-time peaks in September 2021.

It's clear that Hong Kong's property sector is in disarray, with both local tycoons and global investors feeling the impact of a difficult economy. As interest rates hold high and liquidity issues remain, next year is likely to see more distressed sales, especially in the luxury and commercial sectors. With homeowners and developers both facing steep losses and mountain debts, it is difficult to envision a speedy restoration. As of now, the market's future is highly risky, and one may wonder just how deep the fallout will go in 2025.

Hong Kong's Struggles vs. India's Real Estate Growth 

Hongkong's property sector is crumbling whereas the major cities of India such as Gurugram, Bengaluru and Mumbai are bound to grow even higher. Liquidity problems and high-interest rates have compelled many wealthy investors in Hong Kong to sell properties at deep losses. In contrast, Bengaluru has taken the lead in office space absorption with leasing of 14.74 million sq ft (msf) in 2024, a rise of 66% year-on-year, according to a JLL report.

Total absorption recorded across top seven Indian cities stood at 49.56 msf which is a 17.9% increase over 2023. With premium apartments in Gurugram witnessing 56% growth in 2024 - the highest across the country - high-end developments are galore in the city, as per a report by real estate consultancy, Cushman & Wakefield. Thisconstituted 87% of the high-end and luxury launches in Delhi-NCR.

Mumbai is witnessing a boom in real estate market as well, with 1.41 lakh new properties registered in the past year -an 11% increase year-on-year. While Hong Kong struggles with corrections and falling property prices, India's major markets are experiencing a steady rise, at least for now.