Since the British colonisation of Hong Kong in 1841 after the First Opium War, Hong Kong has grown from a stony outcrop on the southern coast of China to a territory whose property prices are among the highest in the world. The territory has a land mass of . According to government figures as at 2018, most of the land in Hong Kong is woodland, shrubland and grassland – much of which designated as country parks such as Lion Rock, Plover Cove Country Park and Sai Kung East Country Park, and only approximately 25% of the land mass out of the total territory is classed as "built-up". Most of the 7.3 million people in Hong Kong inhabit an area measuring . Excluding rural settlement housing, which represents 7% of the city's total domestic households, the remainder of the population is effectively squeezed into an area of . Property developers play a direct role in housing in Hong Kong, including the hoarding of approximately of agricultural land which could otherwise be used for housing.
Major developers in Hong Kong Development in Hong Kong has historically been dominated by a cartel of five families, who now count themselves among the richest in the former colony. The developers share similar cost structures and advantages, and settle competition at land auctions by collusive bidding. Similarly, in residential sales, project metrics are equally predictable because the small circle of architects and banks means secrets are difficult to keep for long. They refrain from official price-cutting, although they may offer discounts, cash rebates or other inducements to the buying public. The orderly competition lowers operating risk and ensures lucrative returns.
Property developers are major landlords of residential, retail and office space in the territory, engaged in all aspects of property development, construction, property investment and management. Most hold sizeable construction land banks, such as Henderson Land, Sun Hung Kai Properties, New World Development and Cheung Kong, which hold between them over in the New Territories. Developers' returns have been reinvested into other business sectors such as utilities, which had the benefit of being stable and highly cash-generative, and often had significant real estate of their own. Leading conglomerate Cheung Kong Holdings, controlled by Li Ka-shing, is the foremost port operator, and also has significant retail presence within the territory in form of hotels, telecommunications, retail stores – supermarkets (ParknShop), home appliances (Fortress) and cosmetics chains (Watsons).
In recent years, Private equity real estate firms such as Gaw Capital and Phoenix Property Investors have also been increasing their holdings in Hong Kong real estate.
Sun Hung Kai is the largest real estate company in Hong Kong by market capitalisation. According to 2012 estimates by Barclays Capital, Sun Hung Kai, Cheung Kong and Henderson Land Development together provide an estimated 54 percent of the 20,398 private housing units to be launched in Hong Kong as at 2012.
Hong Kong-based consolidated turnover figures and reference periods in parentheses. ('Interim' indicates 6 months' figures) Sun Hung Kai Properties (HK$79,721 million – interim 2025) Cheung Kong Holdings and its listed subsidiary Hutchison Whampoa Property, both controlled by Li Ka-shing ($21,700 million – interim 2011) New World Development ($9,127.5 million – interim 2011) Henderson Land Development, controlled by Lee Shau-kee ($9,919 million – interim 2011) Wheelock & Co. Its subsidiaries is The Wharf (Holdings) and Wheelock Properties, etc. MTR Corporation, controlled by the Government of Hong Kong ($3,103 million – interim 2011) Kerry Properties ($2,344 million – interim 2011) Sino Group ($5,761 million – interim 2011) China Overseas Land and Investment Limited (HK$2,120 million – interim 2011) Chinachem Group, controlled by the estate of Nina Wang Chinese Estates Group, controlled by Joseph Lau (HK$857.9 million – interim 2011) Emperor Group, controlled by Albert Yeung ($1,048 million – interim 2011) Great Eagle Holdings – mainly investment and hotel operations ($2,230 million – interim 2011) and its listed subsidiary Champion REIT Hang Lung Group, controlled by Ronnie Chan ($5,714 million – full year 2011) Hopewell Holdings, controlled by Gordon Wu ($587 million – interim 2011) Lai Sun Development, controlled by Peter Lam (HK$849.6 million – full year 2011) K. Wah International, controlled by Lui Che-woo ($682 million – interim 2011) Nan Fung Group controlled by Vivien Chen
Commercial property only Hongkong Land, controlled by Jardine Matheson ($9,547 million – full year 2011) Swire Properties, subsidiary of Swire Pacific (undisclosed – interim 2011) Hysan Development Representation The leaders of the various development firms are public figures whose opinions are regularly solicited by the media. Real Estate Developers Association (REDA), the industry body representing the developers established in 1965, has had only 3 chairmen since its inception. It was headed by Stanley Ho for 25 yearsCheung Chi-fai (11 August 2011). "Developers 'too powerful', poll finds" South China Morning Post until he stepped down in 2011, to be replaced by former Swire Properties managing director, Keith Kerr.Ma, Mary (15 April 2011). "Delicate task for a tough guy", The Standard."Property group is rich men's turf", The Standard. 14 April 2011. Four of the richest people in Hong Kong (with Raymond and Thomas Kwok of Sun Hung Kai counting as one) according to Forbes – Li Ka-shing (Cheung Kong), the Kwok brothers, Lee Shau-kee (Henderson Land Development), and Cheng Yu-tung (New World Development) – are vice chairmen.
According to an analysis by the South China Morning Post, 12 major property conglomerates directly speak for at least 64 seats on the 1,200-member committee that selects the Chief executive.Chong, Tanna (23 February 2012). "Big guns line up for Tang". South China Morning Post Through interests other than property, they have influence on many more seats, such as transportation.Frew McMillan, Alex; Pomfret, James (23 March 2012). "Hong Kong property tycoons muscle in on leadership poll". Reuters. Archived from the original on 23 March 2012.
Developers' interests are represented in LegCo in a functional constituency seat for the real estate and construction sub-sector. Abraham Razack has occupied the seat since his first election in 2000; he has since been elected unopposed four times.
Public perception and policy failure Historically, there has been public perception that the government maintains a high land price policy in order to economically benefit from it.Liu, Pak Wai. Land Premium and Hong Kong Government Budget: Myths and Realities, Institute of Global Economics and Finance, Working Paper No. 19. February 2014
In a study commissioned by REDA in 2010, some 90 percent of property-buyers had an average, negative or very negative impression of the property tycoons. Those surveyed were unable to identify what the association did best, and their main criticisms were a lack of transparency coupled with a perceived closeness to the government.Ip, Chris (14 August 2011). "Painful truth hits home for building giants". South China Morning PostCheng, Joseph Yu-shek (p.210-211). "The Emergence of Radical Politics in Hong Kong: Causes and Impact". China Review, Vol. 14, No. 1, Special Issue: Urban and Regional Governance in China (Spring 2014). Scholars note the drastic change in land use policies of the government since the early years of Tung Chee-hwa's administration: namely, a scaled back provision of public housing and an increase in land supply to the private sector. These measures had the effect of creating shortage and in driving up housing prices significantly since the SARS crisis in 2003.
An editorial in Ming Pao said: "Though developers have used controversial marketing gimmicks, the government has rarely exercised its powers to protect consumers. Citizens disapprove of developers. Many are convinced that some government policies are excessively favourable to them. That is why the generality of citizens have the impression that the government colludes with businesses." In addition to various misleading and opaque sales practices, the widening wealth gap and housing prices beyond the reach of everyday residents have become core livelihood issues.Editorial (21 August 2011). "A long way to go on transparency" South China Morning Post According to BusinessWeek, property prices in Hong Kong have tripled and median monthly household incomes have stagnated at around HK$20,000 (US$2,580) since 1997.Lui, Marco; Wong, Kelvin (20 March 2012) "Hong Kong’s Leung Calls for End to Attacks in Leader Contest". Bloomberg BusinessWeek The vicar-general of the Catholic diocese demonised Li Ka-shing for his policies, comparing him to the devil. Suffering criticisms of opacity, the association engaged Ogilvy Public Relations, at whose behest a website was launched in July 2011.
According to an opinion poll published in August 2011 by the Chinese University of Hong Kong, two-thirds of those interviewed thought developers cared only about making money and nothing about social responsibility. Although Chief Secretary Henry Tang claimed in May 2011 that there was no such thing as "property hegemony" – the alleged dominance of developers over local politics and the economy — 78 percent of those polled agreed it existed in Hong Kong. Half of those questioned believed the government could still restrain the developers' power and influence through control of the supply of land and housing. Roughly one-third strongly agreed that developers had contributed to the city's economic prosperity, 30 per cent 'fairly agreed', and another 30 per cent disagreed; 44 per cent thought developers had the most control over property prices, with the government scoring 23 percent.
REDA has consistently lobbied against government regulation in the property sector. Nevertheless, the political influence they wield has been the source of disharmony within Hong Kong society. Public discontent has escalated to hatred of the property tycoons. Markus, grand nephew of Run Run Shaw observed: "Until recently, crony capitalism was a conspiracy theory ... Now with what's happened with Donald Tsang and his relationship with these businessmen, the conspiracy theory has been revealed to be true." During the final years his administration, Tsang became the focus of controversy over pecuniary benefits he allegedly received from property tycoons, such as a trip to Phuket on a private jet allegedly owned by Cheung Chung-kiu, a billionaire businessman from Chongqing; transport to Hong Kong from Macau aboard a $19 million yacht owned by Thomas Lau. Rafael Hui, Chief Secretary appointed by Tsang, also came under investigation by the ICAC, and was convicted in late 2014 along with several principals in the property industry in a landmark corruption case. This event led some to suspect that Tsang intentionally repressed longer-term strategic development policies for fear of upsetting the developers' cartel.The Second Chief Executive of Hong Kong SAR: Evaluating the Tsang Years 2005–2012. Cheng, Joseph Y. S. City University of HK Press, 1 July 2013. pp 226-227
During the 2019–20 Hong Kong protests, Chinese state-run press agency Xinhua attributed the social unrest to the unaffordability of housing, and blamed vested interests for "maximis[ing] gains by obstructing the government in its bid to boost land supply, or raising the price of the land they hoarded, or by changing the land use". A commentary in People's Daily urged: "For the sake of public interest … it is time developers show their utmost sincerity instead of minding their own business, hoarding land for profit and earning the last penny".
Government land sales