In the past five or six years, Hong Kong's property market has continued to heat up, and the trend of property speculation has become more and more serious.

Central, Wan Chai, Tsim Sha Tsui East and other prosperous business districts have frequently reported that entire commercial buildings have changed hands at high prices, among which the most talked-about is the Golden Gate Building of Li Hualong's company Gammon Construction Company, as well as the speculation of the two federal and international buildings in Central.

The Golden Gate Building was not bought and sold in its entirety, but Mr. Lee's sale of most of the building's properties and the fact that the chairman of the company was sent to jail by Mr. Lee's article drew widespread coverage in the Hong Kong media.

In the early years, Yongan Company spent a lot of money to build the famous Yongan Department Store in the prosperous area of the magic capital, and today's Yongan Department Store is not as brilliant as it was back then, conservative management, but it is also a large company.

When Yongan bought the federal and international buildings, it caused quite a stir, and one newspaper used the headline "Old Trees Bloom New Flowers" to report on the company's new investment.

The blazing wind of property speculation further pushed up land prices and property prices, which were far from the actual affordability of Hong Kong people at that time.

Li Huawen and Li Huahu chatted a few words about Jianing Real Estate, and Li Huahu changed the topic and asked: "Big brother, did the third brother tell you how much the house price will fall this time?" ”

"In the second half of last year, there are also residential transactions this year, and some housing prices may fall by more than 50%, and high-quality properties such as Taikoo Shing and Sha Tin City One will have a smaller decline. At first, I was surprised to hear his prediction. ”

"I'm surprised, too!" Li Hua Longhu smiled, "I remember that in 75 years, when small and medium-sized residential buildings were about 230 yuan per square foot, and the price of a 400-square-foot residential unit was more than 90,000 yuan. Then. Hong Kong citizens have a monthly household income of 15,000, right? ”

"It doesn't seem to be so much, 1975 ......," Li Huawen thought for a while, "I seem to have read it in the newspaper, in 1975." The average monthly household income of Hong Kong citizens is about 1,300 yuan. ”

"1,300 yuan, even if you earn 1,300 a month, the money to buy a 400-square-foot small residential unit is equivalent to about 70 months of work for citizens, which is six years. In recent years, Hong Kong's household income has more than doubled. I read in the newspaper that last year, the average monthly income of a family was 3,000 yuan, and a 400-square-foot residential unit was sold for 300,000 yuan, and the purchase of a small residential unit was equivalent to 100 months' income of citizens. The pressure on ordinary people to buy a house has increased a lot! ”

"Who says it's not. At present, property prices in Hong Kong are not based on the level of economic development and the ability of ordinary people to pay, and when consumers' wage income is far from keeping up with the increase in property prices, it is inevitable that property prices will fall. ”

"Huh!" Li Huahu smiled, "Big brother, we are the top rich people in Hong Kong, we are sitting in a good car and chatting about the rise in housing prices, and ordinary people have a hard time." In particular, we make a lot of money by developing real estate, let the media know, what will they write? ”

"Split personality, psychopathology, being rich and unkind, and the like can be written."

"I feel like we have a clear conscience, and over the years, we've donated a lot of money to charity."

Li Huawen and Li Huahu arrived at Li Hualong's house, and the three brothers didn't talk a few words, so they moved the topic to real estate.

Li Hualong owns several real estate companies. He is also the controlling shareholder of Hang Seng Bank, and has noticed that loan interest rates have continued to rise and credit to banks and finance companies has contracted.

Late 70s. Hong Kong's economy began to overheat, and the inflation rate had reached more than 15%, but in 1978, Hong Kong's prime interest rate averaged only 6.68%, while the average mortgage interest rate was 10.62%, forming a market demand for funds that continued unabated.

In the real estate frenzy, Hong Kong's imports of construction materials have increased significantly. It also led to an increase in the trade deficit, with the Hong Kong dollar exchange rate weakening due to the increase in the foreign trade deficit, which stimulated the rise in interest rates.

In 1980, US President Ronald Reagan took office and tightened monetary policy to combat inflation, which led to a sharp rise in interest rates in Hong Kong.

In July 1981, the Hong Kong government implemented a three-tier financial system and tightened control over finance companies, which resulted in a significant reduction in the short-term deposits of finance companies and an accelerated credit contraction.

On 7 October 1981, Hong Kong's prime rate rose to a record high of 20%, and mortgage rates rose to 21%.

During this period, the Hong Kong government also revised the land sale policy to abolish the "land purchase by instalments", which made the cost of land purchase even heavier for developers.

As interest rates remain high, so does the credit of banks and finance companies.

In 1981, the growth rate of loans from banks and finance companies was quite impressive, with loans for buying houses by instalments amounting to 22 billion yuan, an increase of 30 percent over the previous year.

However, by the fourth quarter of 1981, there had been little increase in bank loans for instalment payments, and banks had become more cautious about real estate loans, and some loans were based on the lender's ability to repay in addition to the value for money of the mortgaged property.

As early as May 1981, at the request of Li Hualong, Hang Seng Bank also formulated a new building valuation method, that is, the building area is no longer calculated according to the gross floor area, but is calculated based on the saleable area, and the loan-to-value ratio is also reduced to 50%.

In cooperation with Hang Seng Bank, buyers can purchase a house in the first phase of Sha Tin New City with a maximum mortgage ratio of only 60%, that is, a minimum down payment of 40%, and they can choose to pay it in a lump sum or a mortgage ratio of less than 60%.

"After a while, there is a commercial plot in Sha Tin, are you interested in developing it together?" Li Hualong asked.

"Third brother, aren't you optimistic about the property market, why do you still buy land?" Li Huahu asked puzzled.

"I think there is a lot of potential for Sha Tin's development, and there will be a lot of people living in Sha Tin in the future, and the development of a large shopping mall will definitely make a profit." Li Hualong explained.

"Since you are optimistic, then I will participate in the investment." Li Huahu smiled.

"Or, invest directly in the name of Li's father and son real estate company." Li Huawen suggested.

"Okay." Li Hualong nodded with a smile.

"Li Father and Son Real Estate Company, don't you think the name of this company is vulgar?" Li Yisong interjected with a smile.

"It's not bad, the English name is Lees&sonsProperties Limited, I think it's quite stylish." Li Huahu said with a smile.

"Whatever you want." Li Yisong smiled, "How much does it cost to invest in a large shopping mall?" ”

"It will not be less than five billion, it is a comprehensive project, in addition to shopping malls, there are hotels, residential buildings and commercial buildings." Li Hualong said.

"Can the hotel project be handed over to me for investment?" Li Huawen asked. (To be continued.) )