FOR ANYONE who wasn’t paying attention, China is serious about its common prosperity drive. Aiming to rein in billionaires and reduce income inequality, regulators have cracked down on tech giants and mainland real estate developers alike, costing shareholders over $1 trillion along the way. Last week, officials set their eyes on the territory of Macau, the world’s biggest gambling hub. Can Hong Kong’s property tycoons remain unscathed much longer?

Investors don’t seem to think so, and Monday’s selloff was swift and brutal. The city’s big four developers, Sun Hung Kai Properties Ltd., CK Asset Holdings Ltd., Henderson Land Development Co., and New World Development Co., all tumbled to their lowest level since 2016. Having witnessed what happened to China’s education stocks, another sector in the crosshairs, and Macau’s casino shares, investors are selling first, and asking questions later.

The share moves come after reports that China asked the territory’s real estate billionaires to resolve the city’s housing crisis. Some officials in Beijing have blamed Hong Kong’s protests in 2019 on its sky-high home prices, which fueled resentment among the youth. The city was ranked the world’s least affordable housing market for the 11th year, according to a report put out by two think tanks. So, what’s next for Hong Kong?

Sell-side analysts are preparing for doomsday scenarios: What if developers have to donate all of their (rather substantial) agricultural land holdings to the government? What if they are required to sell all of their future residential land banks at cost? Hong Kong’s limited land supply is a big problem that the government has been slow to address. Only about 6.9% of its land is available for housing development, while agriculture accounted for another 6.1%.

Did investors overreact? Over the years, the territory’s real estate developers have diversified, to mainland China and beyond. New World Development and CK Asset and have just 14% and 16% of their net asset value exposed to Hong Kong residential property, estimates JPMorgan Chase & Co.

Catch the falling knife at your own risk. We knew that the rules of the game had changed as early as July, when Beijing put ride-hailing giant Didi Global, Inc. under regulatory review after it defied warnings and went ahead with its US initial public offering. China no longer sees shareholder capitalism serving the nation well; now, it’s going for stakeholder capitalism, where customers, employees, and even local governments all have a say in how companies do business and retain their earnings.

Soaring home prices are becoming a political problem around the world. In China, out of desperation, some cities with red-hot housing markets have instituted price controls. Across the border, in the Tier-1 cities of Guangzhou and Shenzhen, local governments launched price reference systems for existing home sales. If, for example, you can sell your apartment for $1 million, but your buyer can only get a bank mortgage based on the suggested sale price of $500,000, the buyer will have to shell out a much bigger down payment. This reduces demand and dampens home prices.

Amid China’s regulatory crackdowns and stock selloffs, real estate developers in the blue-chip Hang Seng Index had been fairly immune, down only 15.5% year to date, versus the Hang Seng Tech Index’s 26.7% tumble, and Macau casino operators’ 46% bloodbath. That seems too good to be true. China’s whip is coming for Hong Kong’s property billionaires, too.