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When will Hong Kong Property drop? Posted by HKBY (349 days ago) Hello everyone, Find what you are after in our Hong Kong A-Z Directory Need a Part Time Maid? Commission-Free Flats Buy a Car? 2 for 1 Dinner  Posted by Loyd Grossman is Miss Venezuela (349 days ago) If you can afford to buy, you feel secure in your job and you can cope with a sharp increase in interest rates, then buy. I don't think the secondary market will drop on Hong Kong island or Kowloon. A lot of new supply in New Territories.
Posted by HKBY (349 days ago) thanks for response,but right now price of secondary market is on high level, this will definatly drop after new government will take office in july. Posted by OffThePeak (349 days ago) Look back at the last time the consensus amongst those forecasters was for a 10-20% drop. That was the end of last year, after a tiny drop of a few percent, there as a 10% rally. So the best thing you can say about those forecasts, is that they tell you more about Market Sentiment, rather than what is actually going to happen in the market.
Posted by HKBY (349 days ago) before i was looking to buy a apartment around 5million 1000sqft net but later i invested some money in business , now my target is 3million around 600sqft. the area i am looking its Jordan near to austin Station. Posted by Loyd Grossman is Miss Venezuela (349 days ago) 5,000 per square foot? That's very tight for Austin. You have the high speed link coming in soon. Are you looking for a dilapidated flat? Even then, most owners will hang on for a developer buy out. What about Yoho Town in Yuen Long? Why do you think CY Leung is going to destroy the property market? He will mainly be building in Fanling and Tung Cung. Posted by HKBY (349 days ago) well Jordan is very convenient, i have office in Jordan area,my kids study in local public school in yaumatei. out patient clinic,hospital,subway link ,transport. i was thinking to move to yuen long in kam tin area where i can buy a nice village house below 3million. i have seen one flat near to ferry street in 48 years old building 12/F, net area 600sqft, asking price 3.2million. its reasonable price at the moment in jordan area but after reading lots of articles might property will drop 20-30% by 2013. if the prices really drop or even drop 10-15% its worth to wait till next year feb or march. Posted by Loyd Grossman is Miss Venezuela (349 days ago) 5,000 per square foot? That's very tight for Austin. You have the high speed link coming in soon. Are you looking for a dilapidated flat? Even then, most owners will hang on for a developer buy out. What about Yoho Town in Yuen Long? Why do you think CY Leung is going to destroy the property market? He will mainly be building in Fanling and Tung Cung. Posted by GW80 (349 days ago) HKBY, if you're happy with a 10% decline, you probably dont need to wait till next Feb or Mar. I would make offers discounted by 15% whenever sentiment is weak (like the past 2-3 weeks). Chances are, you could settle 10% cheaper with the right landlord.
Posted by OffThePeak (348 days ago) HKBY, Posted by HKBY (348 days ago) offthepeak i was there last week, i searched whole area,most of the buildings flat size is smaller net area around 310-330 to 440sqft, very few buildings with net size 600sqft or 565. but price is more or less same as Jordan ,Yaumatei area. Posted by walkup3 (348 days ago) If you are looking in Yau Ma Tei area you will already know that not all the apartment blocks are old and dilapidated. There are opportunities, but 5000 psf is tight. Re looking at properties in the 3m range, nothing much is going to happen except relentlessly creep up as you have discovered. Anybody who thinks that a 3m apartment is going to drop to 2m is going to be mightily disappointed. My main concern re Ferry Street is that it seems to be slap-bang in the middle of a heavy traffic intersection. And that is why it is 5k psf. So maybe not that place whatever the price. Posted by traineeinvestor (348 days ago) I wouldn't pay too much attention to the "experts" - I am not aware of any that has been consistently right. A quick trawl through recent news feeds will throw up a mixture of predictions ranging from the mildly positive/its a good hedge against the "inevitable" inflation to the insanely negative (CY Leung will attempt to out do his role model Tung Chee Hwa and crash prices by more than 70% or financial armageddon is upon us). Posted by Jim Fit (347 days ago) Please bear in mind that HK property prices are not determined by supply and demand. They are determined by a civil servants-led Government that keeps supply artificially tight, for the benefit of the property tycoons, in whose pockets they reside. Hello, Raphael Hui !! Posted by OffThePeak (347 days ago) Not so fast, Jim Fit ! Posted by Jim Fit (347 days ago) ....make many existing HK homeowners very unhappy. .... Posted by walkup3 (347 days ago) So the question is Jim, would you be in a position to move if prices dropped 50%? ie do you need a 50% drop in order to purchase. Secondly if prices did drop would your nerve hold to enter the market? Thirdly, since talk is cheap, do you have skin in the game of your conviction and therefore shorted some or all of the HK property stocks. Or is this just a shouting from the sidelines?
Posted by traineeinvestor (347 days ago) @ Jim Fit - good luck with holding out for a massive drop in the market. It may (or may not) happen but I wouldn't base my life plans on that outcome. What will do you do if all the money printing results in long term inflation? At even 5% inflation a year, the value of a dollar halves in about 14 years. Posted by Jim Fit (347 days ago) One word: KABOOMSKIE !! (it's Russian) Posted by walkup3 (346 days ago) Hello! The Occupy Wall Street Team have arrived. Bob Dylan and tents. Posted by OffThePeak (346 days ago) "50% drop ...if prices did drop would your nerve hold to enter the market? " Posted by Loyd Grossman is Miss Venezuela (346 days ago) I bet Bob Dylan owns quite a few properties. Posted by Jim Fit (346 days ago) Admit it, all you absurdly-high-property-prices-forever "believers", you are having your doubts, and it is keeping you awake at night. Posted by Loyd Grossman is Miss Venezuela (346 days ago) I reckon Bob Dylan took a pile of money from suckers and then piled it into bricks and mortar. It would be interesting to find out what he actually does own. Posted by OffThePeak (346 days ago) There is absolutely no reason to panic now.
Posted by walkup3 (346 days ago) re: "I reckon Bob Dylan took a pile of money from suckers and then piled it into bricks and mortar. It would be interesting to find out what he actually does own." Posted by Jim Fit (346 days ago) come, fellow believers, say something soothing to OffThePeak to calm his nerves. Or each others nerves. Isn't that what you are doing here each and every day, after all ? Posted by walkup3 (346 days ago) What makes me nervous is the thought that Jim will knock on my door and ask whether he can crash on my sofa for a few nights.....or more. Posted by Loyd Grossman is Miss Venezuela (346 days ago) Jim Fit. Tell us where you think prices will be in 6 months. Can you give us a ballpark guess? Posted by mallani (346 days ago) People have been shouting "the ship is thinking" for a long time. Posted by elsdon (346 days ago) I don't think anyone is arguing that 12 months ago to PRESENT was a good time to buy, in fact, you can contort any period of time as a good time. What does matter is your realized gain/loss when all transactions are done. As people have said in this thread before (and I am paraphrasing), a loss isn't a loss unless you sell. By the same token, a gain isn't a gain until you sell. Posted by traineeinvestor (346 days ago) A lot of people either have no mortgages or interest rates that are around 1%. Posted by Loyd Grossman is Miss Venezuela (346 days ago) Trouble is Elsdon, the HK property does not 'trade' like it used to do. It's now made up principally of end-users plus some ultra rich players that can buy on dips. If you intend to trade, instead of buy and hold or just live in the property, it would be better to look at property stocks like Uncle Four suggested not so long ago.
Posted by Ed (346 days ago) Lloyd... as you know, that is not correct. Posted by Ed (346 days ago) Eldson... further to your comments... Posted by Loyd Grossman is Miss Venezuela (346 days ago) Ed. When the 1997 bubble burst, it burst in about a week. I remember fielding loads of calls from agents trying to off-load property. If this market has been stable right through 2008 then what does this tell you? In the US you had NINJA mortages, in HK post 1997, it was 30% down and we can check your entire credit history including credit cards and loans from other banks. Posted by OffThePeak (346 days ago) "say something soothing to OffThePeak to calm his nerves"?? Posted by Loyd Grossman is Miss Venezuela (346 days ago) Ed. For a bubble, people need to have over-borrowed. If that isn't the case, it can't be a bubble. It's fundamental, it's like you need a fire for a barbecue. Expensive does not necessarily mean bubble. Property is expensive in central London, Manhattan and Monaco but it doesn't mean there is a bubble. Prices have risen sharply but, in my view, that was a recovery rally. They are only up a fraction from 1997 so it depends on the cut-off point for the graph. The current bubble is in US treasuries. When the money comes out of there, bond holders are going to get whacked on a) the prices they sell at b) the high price of equities if they switch and c) inflation. Posted by mallani (346 days ago) Ed, of course in HK Island property prices are now higher than in 1997 in nominal terms, but much lower in real terms. Posted by Ed (346 days ago) Mallani - of course they are higher in real terms when you factor in inflation... but that is not the point.. the bubble was so massive in 1997 that anything exceeding that now - even with inflation factored in - is IMHO - a bubble...
Posted by Ed (346 days ago) Found a far better graph.... Posted by mallani (346 days ago) Ed, of course the figure you just posted isn't "real prices", in spite of what it says. It's nominal prices, unless there has been no inflation in Hong Kong over the last decades... Posted by Ed (346 days ago) Actually I missed that ... Posted by Ed (346 days ago) "Such concern looks justified. The Economist’s own quarterly home-price index compares prices in 21 economies. The most recent index, published in March, found that Hong Kong property was then 58% above “fair value”, which we define as the long-run average ratio of prices to rents and incomes. That put Hong Kong second only to Singapore as the most overvalued property market in the index." Posted by mallani (346 days ago) Ed, somehow when the economist doesn't write what you want it's rubbish, but when it writes what you want it's great? You just need to look at this figure: http://hk.centadata.com/cci/cci_e.htm which gives the nominal values, and compare it to the economist one. You see that the trend is the same? How can the prices now be slightly above those of 1997 in the centadata figure if the prices are nominal, and still be above in the economist one if the prices are real? Of course the real prices have to be lower than the nominal prices. Posted by walkup3 (346 days ago) Lots of 'ifs' going nowhere. The fact that Ed does not have the confidence to call the market in Sheung Wan for 3mHKD apartments in either 6 months or 12 months tells me all I need to know. Mostly just left with conditional witterings predicated with 'eventually'. Posted by Ed (346 days ago) As I have said it doesn't matter if the Economist is right or wrong on real or nominal terms... Posted by Jim Fit (346 days ago) Mr Lim in CWB is trying to sell a 13-storey office tower for close to HK$ 1.000.000.000.-
Posted by Ernie20 (345 days ago) I love Ed's graph. Short period of time? It shows a steady, near decade long recovery in prices. Armageddon? Look how significant the Lehman crisis was. You've got to be very accurate to play for those quick dips. Unlike 97 property money isn't so much borrowed this time. Maybe a short downturn and then HK property will come roaring back again. This is money making town, it costs for a seat at the table. Can't pay? On your way. Posted by walkup3 (345 days ago) Re: "Clever investors buy when the market almost reaches the bottom". Posted by traineeinvestor (345 days ago) Never argue with a troll, onlookers may not be able to tell the difference. Posted by mallani (345 days ago) "Unlike 97 property money isn't so much borrowed this time." Posted by traineeinvestor (345 days ago) @mallani Posted by mallani (345 days ago) You are correct, inflation was closer to 1.5% a year on average from 1997 to 2010: http://www.tradingeconomics.com/hong-kong/inflation-average-imf-data.html and http://www.indexmundi.com/g/g.aspx?c=hk&v=71 Posted by traineeinvestor (345 days ago) 1.5% devaluation each year means HKD1.00 at the begining of 1997 was worth about HK$0.80 at the end of 2011 - a 20% decline suggesting that the mass market at least is still below 1997 levels in inflation adjusted terms. Posted by Loyd Grossman is Miss Venezuela (345 days ago) I see Deutsche Bank has put out a report (June 13 2012) by Tony Tsang and Jason Ching that HK property may fall 'up to' 20% because of CY Leung's new land supply. This follows a prediction of a 40% 'worst case scenario' drop from Raymond Ngai at Bank of America last. They could be right. However, the LGMV view is that they may be utterly clueless given all the money printing, lack of debt and pent up demand. However, I wouldn't buy New Territories property. At the very best, flats there will tread water. Still super bullish on HK side though.
Posted by Loyd Grossman is Miss Venezuela (345 days ago) Anyway, please make a note in your diaries. We should check again next year and see who is right. Posted by mallani (345 days ago) We should start a betting exercise. Everybody can say what they think the Centadata index will be on December 10. The one who is closer gets $100 from everybody else (Christmas bonus). Posted by walkup3 (345 days ago) I don't care if the index is down or up. If on the other hand somebody could look into their crystal ball and tell me that HKD3m apartments in Sheung Wan will drop to 2million in the next 12 months I will try to get ready. Not to the extent though of now selling to raise capital. Why? because I believe the odds are low. Particularly low in the areas I am interested in. Those waiting to buy on the dips have been waiting for some time now. Posted by elsdon (345 days ago) I think walkup3 is playing his hand right. He knows an area, he knows it very well, and I agree that certain areas in Hong Kong are simply too strong to realize a loss. They're relatively cheap enough and resilient to rental vacancies that you can hold through anything short of a nuclear holocaust. Posted by mallani (345 days ago) I think walkup3 is too optimistic, if he thinks that one area is "loss proof" and all others are. Same as Lloyd, who thinks that NT will tank but HK Island is not going to drop. I think all markets and related, and all areas are related. Surely if NT drops by 30%, HK Island willd drop too, though perhaps only by 25%. Posted by walkup3 (345 days ago) I cannot guarantee that certain areas are 100% bomb-proof price-wise, but I do agree with elsdon that the key word here is 'resilient'. Resilience in certain areas within a particular price range. If prices do happen to significantly drop within the next 12 months, I really hope they do so before the Island Line MTR extension is completed. Then I can jump in. In the meanwhile it is a race against time financially. A 25% drop from 3million to 2.25million? I don't see it. Making general comments about up/down prices re HK is relatively easy. Seeing it translated in particular areas/particular roads/particular types of property/particular price ranges is not so easy. Posted by Ed (345 days ago) Countering the assumption HK property will drop.... Posted by Loyd Grossman is Miss Venezuela (345 days ago) Mallani. I understand your point. However, I think the HK property is becoming more mature. I don't know if you are familiar with London but ask yourself if Chelsea, Kensington or Fulham property would go down if they started building a load of new flats in Barking. Like Walkup said, nothing is 100% bomb-proof, but HK side between Kennedy Town and Taiko looks pretty safe to me.
Posted by mallani (345 days ago) I am not familiar with the HK property market, and I never heard of Barking. It must be a crappy place? :) Posted by OffThePeak (345 days ago) Barking = Kennedy Town ? Posted by HKBY (345 days ago) offthepeak you misunderstood, Mallani like dog barking and this is the reason she live in MA ON SHAN. maybe you know MA ON SHAN most of the house is village type and off course rent is much cheaper than island. most of people have dogs and dogs often barking mallani like dog barking which dose not heard in island side. Posted by fieter (344 days ago) I fail to see why everybody compares prices to 97 and then deduct current prices are inflation adjusted reasonable. 97 was a complete anomaly and a massive bubble. If you look at the centa city index which puts 97 prices at 100 - then consider that at the time property was probably overvalued by as much as 60 % or more - so start from there at a level of 40 and add 3% a year- this brings you to a level of about 60 today. So 40% overvalued. Posted by walkup3 (344 days ago) When someone says they are a great believer in anything I will ask them how much money (if anything) they have placed on their so-called conviction. So in this case are they shorting HK property shares? Usually the answer is nothing. I don't care whatsoever if prices are higher/lower/the same as they were 15 years ago. 1997 is a significant folk memory but not a point of reference or base. Maybe some chartists think so and maybe the end of the world crowd have spent these last 15 years muttering incantations that it will all collapse one fine today. 'Eventually'. Risk is something to manage not hide from. Posted by rob_378 (343 days ago) I know plenty of people who have been waiting for the 30% drop... sold their properties expecting to repurchase.. and instead now find themselves having lost their properties, and even unable to rent in the same area. Posted by Jim Fit (343 days ago) And how does a steady rise in property prices over 8 years equate to a bubble? Posted by Loyd Grossman is Miss Venezuela (343 days ago) The rise came after a 9 year recession and deflation. China has grown quite a bit over the last decade.
Posted by Jim Fit (343 days ago) deflation between 1985 and 1997 in Hong Kong ? Posted by walkup3 (343 days ago) Gee, what you remember is wrong, Mr Bob Dylan fan. In only three years did HK CPI inflation average over 10%. 1989-1991. Posted by Loyd Grossman is Miss Venezuela (342 days ago) I'm talking about between 1997 and 2006 thereabouts. Years of deflation and strengthening of balance. Then property prices rise as most of the financial weak holders have been shaken out. Add in another financial crisis in 2008 and strict government measures against speculation, and what you are now left with is HK property owners who are financially strong and don't speculate. They are all buy and hold. This is why it is very hard to find something cheap and why there are few transations in the secondary market. Posted by Ed (342 days ago) Doesn't look like a steady rise to me... it looks like a spike that started with Central Banks (including China) pumping trillions of dollars into the global economy in 2009... Posted by Loyd Grossman is Miss Venezuela (342 days ago) Ed. Hong Kong is an entrepot and open economy but just how did this hot printed money come into Hong Kong? Who were the main beneficiaries of the printed money and when did they choose to park all this printed money in the mass residential property market? Okay, it meant lower mortgage rates but I don't think they have been the main driver for the rebound in prices. in my view, the main driver has been solid individual balance sheets. I respect The Economist as a magazine on world politics but it is not my first port of call when it comes to HK property. For that, I try to use my own wits. Posted by Ed (342 days ago) Where do you think the cash came from that has fueled a massive buying binge of mainland buyers in HK? Posted by Loyd Grossman is Miss Venezuela (342 days ago) Ed. Mainlanders are no where near the main buyers in the mass residential secondary market. They only figure in the the luxury primary sector. The so-called 'drop' in 2008 was due to weaker speculators exiting the market quickly at fire sale prices. Once they had left, the people holding HK property was essentially long-term investors with strong balance sheets. I know this is less glamarous then your financial melt-down theory, but it is a much simpler explanation. Later all speculators were driven out when the HKMA introduced the Special Stamp duty. This killed off the secondary market reducing to a series of dribbles at very high prices as buyers were forced to buy from a) someone who didn't need to sell or b) someone who needed to sell in order to be able to trade up at today's high asking prices. Posted by Loyd Grossman is Miss Venezuela (342 days ago) Ed. Just tell me why the above theory is so poor.
Posted by elsdon (342 days ago) Hrm.. My question is, where did all this 'new' wealth come from? Assuming it's from the young families growing up and being able to buy new, permitting previous owners to trade up.. Posted by Loyd Grossman is Miss Venezuela (342 days ago) So where did the increase come from? It wasn't an increase. It was a quick fall and a quick recovery once the fast money ahd left. You are taking the bottom of the sharp sell-off post Lehman as your starting point and Ed is confusing this with hot pribted money post Lehman (as if major US banks want to invest in mass residential HK property instead of repairing their own balance sheets). This was a blip on low volume. In 2008, the property market had just recovered after 11 years of recession and about 9 years of defaltion. People, had been saving for a decade. That's where the money came from. That, plus the fact there are a lot rich people here. Posted by Loyd Grossman is Miss Venezuela (342 days ago) So why isn't the HK property market tanking? Posted by Ed (342 days ago) I would suggest that is because Central Banks are still printing hundreds of billions of dollars... Posted by Loyd Grossman is Miss Venezuela (342 days ago) The equity market fell like a stone, why not HK property? Why aren't property agents phoning me up with great offers? Why is the HK government trying to talk down the market and releasing more land? Posted by Loyd Grossman is Miss Venezuela (342 days ago) Ed. I'm not just talking my book, my personal ratings for NT property now is 'junk' thanks to this idiotic government which tries to help but makes things worse. I would only pay 3,000 psf for NT property now. HK side, 10,000 psf minimum (with perhaps the exception of Chai Wan). Posted by Ed (342 days ago) Historically property falls after the stock market... why?... because property is less liquid... you cannot just unload a property like a stock by pushing a key on your computer...
Posted by traineeinvestor (342 days ago) Ed - there are some massive differences between the recent US and Spanish bubbles - the most important of which are: Posted by Loyd Grossman is Miss Venezuela (342 days ago) Basically, the HK market is now solid. However, new supply in NT will lead to trouble in the NT further down the line. This could affect HK side but I'm betting it won't due to a) inflation and b) the almost infinite long-term demand for HK island property assuming no political or social disasters in HK and China. If you don't agree, then remember that Fulham, Notting Hill and Islington used to be working class areas. That's in my lifetime and I'm 48. Posted by Loyd Grossman is Miss Venezuela (342 days ago) Fulham - Sheung Wan, Notting Hill - Tai Hang, Islington - Tin Hau. Posted by Jim Fit (342 days ago) Why are you brilliant and successful property investors so defensive ? Posted by walkup3 (341 days ago) LGMV, Sheung Wan definitely not Fulham. Sheung Wan 1 stop away from the 'City'. Fulham miles away in West London from the financial centre. The nearest equivalent might be Clerkenwell, historic artisan area next to the City. Dried food in Sheung Wan, fresh meat from Smithfield Meat Market close by to Farringdon Tube station. Another candidate Shoreditch around Old Street Station. Posted by Jim Fit (341 days ago) Not to mention 'name calling' instead of presenting arguments.
Posted by Jim Fit (341 days ago) Loyd, I was replying to an insulting post from walkup (now deleted). Posted by OffThePeak (341 days ago) Fulham - Sheung Wan, Notting Hill - Tai Hang, Islington - Tin Hau. Posted by Jim Fit (338 days ago) Hong Kong property prices, currently the highest in the world, will never drop. Posted by Loyd Grossman is Miss Venezuela (338 days ago) House prices in Yorkshire look very expensive compared to when I was a kid in the 1970s. They're up by about 13 times. Posted by Ernie20 (338 days ago) Interesting stuff in the Standard today, with Colliers calling a 16-18 drop in small-medium properties over the next twelve months. Posted by Loyd Grossman is Miss Venezuela (338 days ago) What does Colliers know about small-medium properties? Are they just looking at NT? Maybe in NT but I just don't think people are willing to sell at the moment. Posted by Ovolo98 (338 days ago) Maybe in Mid-levels, but certainly not NT. People in Mid-level will soon realise NT is a much better living environment, and will all move there. I expect prices in Mid-level to halve, and reach the levels of NT.
Posted by ballerz (337 days ago) I cannot say there is a bubble in the HK property market. But my opinion is that the market is overpriced because it is diverging from fundamentals everyday due to our "interest rate arbitrage" where 1) Chinese buyers with easy access to our market can buy a property at 2.75% while it costs 7-8% up north, and 2) 90% of HK goods and consumptions comes from mainland and this is driving up general inflation. Posted by Loyd Grossman is Miss Venezuela (337 days ago) Ballerz. Flippers were kicked out of the market with the special stamp duty. Just wealthy people and end-users now. Posted by ballerz (337 days ago) How do you explain all people with cold feet who has been leaving their deposits on the table lately? Posted by Loyd Grossman is Miss Venezuela (337 days ago) There will always be people who pull out but speculation is nowhere near what it was and is no longer a factor. It's moved to the commercial side. Posted by elsdon (334 days ago) Personally, I don't think speculators are out of the market like you think. You're a speculator, you're still in the market. What makes you think that people much like yourself aren't still in there? Posted by walkup4 (334 days ago) The idea that HK taxi drivers are dumb is rather strange to put it mildly. A life built around resentment isn't very productive either. With the pejorative use of the term 'speculator', one wonders whether some aren't yearning for a return of the old days of the Cultural Revolution. Posted by elsdon (334 days ago) That's interesting. I never said all taxi drivers are dumb, just the 'mythical' taxi driver holding 5 flats being heavily over leveraged is dumb. I believe that would be your own inference on the larger taxi driver population.
Posted by walkup4 (334 days ago) I have this vision of someone sitting in a darkened room sticking pins in photos of LGMV's properties, holding them upside down and muttering incantations. Posted by elsdon (334 days ago) That's me.. I'm keeping track of which flats I want to buy first at low, low prices when he goes under and the price of interest is higher than his rent. Posted by Jim Fit (334 days ago) During the last bust of 1998 I read a letter in the South Xinhua Morning Post from an investor/ speculator / property genius who DEMANDED that the Government should see to it that property prices would revert to their high levels in about 10 years (from that date). Posted by ballerz (333 days ago) Hong Kong's definition of a speculator is different than any other place in the world, mostly due to our culture of speculating. While everybody else frowns upon speculators and wish to kick them to the curb so that a free market to operate efficiently, Hong Kong thinks that inflation and bubbles formed by speculators is a free market in operation. Besides the few who gambled and won, the rest of us is content with an increase in asset values but not caring that our buying power has actually decreased. Posted by Loyd Grossman is Miss Venezuela (333 days ago) Jim Fit. The Cheung Kong property is more Lohas Park than Tseung Kwan O (check the address on Google Maps - No.8, Shek Kok Road, Tseung Kwan O, New Territories). Then take a look at a map of the MTR and you will see that Lohas Park is on a spur line and that you usually need to change at Tseung Kwan O (though there are some direct trains). Add in the occasional smell from the landfill and you realise this is hardly a prime location. As I said on the main thread, Tseung Kwan O is where people tend to live if they work HK-side but can't afford prices there. The MTR is quite fast though it involves a change at Quarry Bay/North Point. It's also good for East Kowloon and travelling to the mainland as you can go directly to Kowloon Tong. It's a great suburb but there is a lot of supply there and the only flats that are really sought after are the ones with a direct link to TKO MTR. The rest will just trend along with inflation. I don't see supply here having much affect on HK-side prices in the same way as extra flats in Mile End would not affect prices in Clerkenwell. Posted by OffThePeak (333 days ago) Jim lives in some crazy parallel universe,
Posted by Loyd Grossman is Miss Venezuela (333 days ago) Jim. Do you assume that the majority of the local population will want to move to completely different parts of HK because it is a) cheaper or b) there is more space? If so, you won't be the only one. A lot of analysts and commentators think the same. Personally, I can't see it. How many New Yorkers would be seen dead in New Jersey? Also, Jim. Could you at least give us a prediction of where the market is heading and when you think it is going to happen? It's pretty easy to play the man. Posted by Jim Fit (333 days ago) Loyd, whatever goes up must come down. Posted by Loyd Grossman is Miss Venezuela (333 days ago) Jim Fit. "What goes up, must come down." That is an excellent explanation of gravity. However, prices are not subject to gravity. My father bought his house for 15,000 pounds in the late 1970s and it is now - in nominal terms - worth 250,000 pounds. In real terms, this may be the same, I can't say. yes, the price will eventually fall below 15,000 pounds again when the sun stops burning and earth is eventually destroyed. I really can't see it happening before then. By the way, it's just as easy to say you have a vested interest so I suppose this makes everything equal and the form valid. Posted by Ed (333 days ago) Hmmm... if you bought in 1997 the apple fell rather quickly to the ground... and remained there for the worms to gnaw on for years... Posted by traineeinvestor (333 days ago) @ Ed - citing HK Govt authorities in support of an argument is far from convincing :-) Posted by Ed (333 days ago) The price doesn't have to surpass 97 in real terms to be a bubble... Posted by walkup4 (332 days ago) The end of the world team and common sense. Let's test that. Let's ask Ed if he is firmly recommending all property owners to sell, that would be home owners and investors. Two, assuming that anybody follows that (common sense) advice where should they expect prices to be in one year's time. Two year's time. Answers there will be none. The 'common sense' an empty statement. Not what this article says or that article says. Make a stand. Been waiting months for this...... I will be even more precise. Will a Sheung Wan apartment priced at HKD3m drop to HKD2m one year from now, two years from now? The trouble is that grandiose 'bubble' analyses crumble into meaningless when asked to relate to detail. And detail when it comes to HK property? Dream on from these quarters. Posted by Ed (332 days ago) I am recommending nothing.
Posted by Loyd Grossman is Miss Venezuela (332 days ago) Ed. There is one simple fundamental holding up the property market in HK. It's called cash and most of it isn't borrowed. Posted by punter (332 days ago) You've been repeating this line Loyd, how do you support the claim? Or is it just a guess? Posted by Loyd Grossman is Miss Venezuela (332 days ago) Based on a) a large percentage of HK properties have no mortgage b) all purchase now are 30-50% down c) all other previous purchase would have been mainly 30% down. Speculators without very deep already shaken out. No NINJA mortgages here. Posted by punter (332 days ago) That answer in itself is a non sequitor Loyd. You said moneys are not borrowed, yet your number one and number two answers say buyers borrowed to buy. Posted by Loyd Grossman is Miss Venezuela (332 days ago) If 60% of the non-investment properties have no mortgages, then that's 100% equity. If the remainder were bought with 30% down years ago, I still think there is more than 50% equity in the whole market here - so most of it isn't borrowed money. I think it stands to reason.. Posted by Ed (332 days ago) Lloyd... you made the same comment on the other thread... that most property owners are not mortgaged... Posted by Loyd Grossman is Miss Venezuela (332 days ago) The majority of end-user properties in HK are not mortgaged. I think it's 60% which sounds about right. Like you said, we have been through this. If you scroll back, you'll find this to be the case. Posted by punter (332 days ago) "I think it's 60% which sounds about right." hahahaha. No proof whatsoever. Read back and you'll see that 60% is not 60% of all HK properties, but of something else. Com'on give this BS up Loyd.
Posted by punter (332 days ago) Posted by Elsdon: Posted by Loyd Grossman is Miss Venezuela (332 days ago) A lot of investment properties paid off as HK people don't like paying interest. Very conservative. Posted by punter (332 days ago) Just be accurate when quoting the 60% statistic. It's 60% of self-occupied homes, not of all homes in HK. Posted by walkup4 (332 days ago) With mortgages at rates of Hibor + 0.7% from a year ago I doubt if too many of us are going to be in a hurry to pay off those mortgages whatsoever. Throw in government restriction on LTV of 50% for investment properties for current mortgages and extra taxation on flipping sales and you have a lesser-risked environment. Even at 2.15% the effective interest rate is manageable. Posted by ballerz (332 days ago) @Loyd - you certainly don't know enough about the current situation if you think purchases are done with 30% cash minimum...in the primary market, all the big developers are topping up your down payment up to 25%. You only need 5% cash and the developer will provide you with a 2nd mortgage right of the bat Posted by walkup4 (331 days ago) Re: 'all the big developers are topping up your down payment up to 25%.'
Posted by traineeinvestor (331 days ago) @walkup4 - I am one of them. All my mortgages are currently costing me between 0.86% and 1.04% pa and are tax deductable. With inflation running at much higher levels, why would I be in a hurry to pay them off. Posted by Loyd Grossman is Miss Venezuela (331 days ago) They used to do the 5% down with 25% top-up during SARS and after the 1997 crash (that's how I was able to get into the market) but I think these deals are only offered now in particular cirscumstances - like if a development is a real dog. Also, politically it is not a good idea to offer them and they can still sell the development with 30-50% down anyway. Ballerz. Which development is currently offering 5% down with 25% top-up? Posted by ballerz (331 days ago) @ Loyd - Beaumont. just got a cold call from an agent yesterday to confirm this fact Posted by Loyd Grossman is Miss Venezuela (330 days ago) Beaumount is a dog. Near landfill and even inconvenient for one of the most inconvenient MTR stations, Lohas Park. Posted by punter (330 days ago) I disagree Loyd, Beaumont is just across the road from existing Lohas Park properties. It definitely is priced lower than 2nd hand flats. Posted by punter (330 days ago) Whatever description you give to Beaumount will apply to all units at Lohas Park, so why are they priced differently? Posted by ballerz (330 days ago) Beaumont is not mid levels but it is billed as the largest release on the primary market this year to date, so it is very indicative of the overall market. Posted by walkup4 (330 days ago) Re: 'it is billed as'. Ha ha. Billed by whom? 'Overall market' Whatever that means. Another attempt to rope in new developments in the middle of nowhere, with 'er what? New developments in Wanchai? Second-hand sales in Sheung Wan? I note that Lohas Park looks out over 'Junk Bay'. What a poor effort to drag us from the particular to the general.
Posted by OffThePeak (330 days ago) "Beaumont is just across the road from existing Lohas Park properties. It definitely is priced lower than 2nd hand flats." Posted by ballerz (329 days ago) LOL...when property prices falls in general over Hong Kong, it won't fall in the mid-levels and Wanchai because.....because it just won't! Posted by Loyd Grossman is Miss Venezuela (329 days ago) There is limited supply in Mid-levels and Wanchai and there is almost unlimited supply in the NT. prices in Manhattan and Kensington hold up well, why shouldn't it be the same in HK. The city and the market are now much more mature than in 1997. The demand is also much greater. I will stick my neck out here and say the NT property market has very little influence on HK side prices. NT prices, though, can affect the Centadata Index. Nobody cares about New Jersey property. Posted by Loyd Grossman is Miss Venezuela (329 days ago) Ballerz. Tell me why the price of a NT property should affect prices in Mid-levels and Wan Chai. How is it possible? If someone offers a cheap property in Barking, it's never going to affect priced in the City of London. People don't sell in the City and move to Barking cos it's cheaper inless they have woken up in the mirning and taken some drugs. No one sells in Mid-levels and moves to Lohas Park because it's cheaper. Posted by OffThePeak (329 days ago) Here's how it works: Posted by OffThePeak (329 days ago) Ultimately, tenants and the rents they pay MATTER when you are calculating investment returns. Posted by Loyd Grossman is Miss Venezuela (328 days ago) They are a factor but it isn't a zero sum game. A lot of people want to own a flat in core Hong Kong, London, NY. The market isn't completely cut off from markets elsewhere but these core areas do, to a large extent, march to their own drummer.
Posted by ballerz (328 days ago) @Loyd - the reason is called macroeconomics. The problem with the property prices is not a demand and supply issue. It is the widening interest rate arbitrage that exists. No matter what CYL does with supply issue, it won't move the market because there is an abundance of supply. The public sensing the interest rate arbitrage will be closed by 1) HKMA asking bank to decrease lending as a temporary measure, 2) working towards an unpeg/depeg that would give HK its monetary policy making powers back and align it more closely with China Posted by OffThePeak (328 days ago) Lloyd, Posted by Loyd Grossman is Miss Venezuela (327 days ago) So now that Adam Cheng's soap opera has finished, the stock market can return to normal. Good to see that the latest European financial crisis had absolutely zero effect on the HK housing market. Should start to head a bit higher now. having said that, the political situation here is looking pretty ropey at the moment. |
