HK's Property Bubble and the USD Peg

Yes, the monitary board is defending the peg but this is only to deflect the issue for now and not get everyone off track right now. It will become unpegged without warning as you suggest in my mind as well. Pegged to RMB right away?

As for housing, I see no suggestion of further increases and as I have written since early spring, see the market fall back by approx. 20% (already fallen off by 5%) in real terms of buying by July/Aug this year. It's a buyers market right now as many want to dump thier properties before this correction which I note occurs.


This means you can both afford too buy with low rates but walk away from every deal you engage in that doesnt show at least a 10% drop from last months pricing and another 10% in negotions with seller. I am waiting until June to start looking at I want 20% corrrection in asking and 10%-15% in negotiations.


The greed in realestate will have someone selling ready to give you the green light.


My opinion only.


Next on tap, ASIAN DOLLAR 5-7 years out!

Mr. Cynical is correct, just like the lag in all numbers. We know landlords will all hold together in plugging the ship if leaks are pending however as we all know in HK, when a few rats jump they all do. Even if prices in some areas dont seem to be effected on asking, its room for negotiation that accounts for the correction as well. Buy with the thought of owning in HK for 3-5 years and starting in the next 4-6 months and you should be okay.

I don't quite understand this assertion that HK landlords hold together ... HK seems to me to be one of the few places that I have seen/read about where prices get discounted immediately by rational informed selfish capitalist investors (of which there seems to be a lot) when there is bad news. You would expect non-investors (i.e. owners) or the socialist masses suggested above to try to sell in a more orderly fashion because they think it is either an asset (the fact that it is an expense seems to pass most by) or for the good of us all (kind souls one and all).


What I don't understand is that almost everyone during SARS was saying the world is coming to an end and hence few were buying, now it seems that more than a few people think they can simply wait till the next big slump/disaster. When people are really sick and authorities are scared, will people really start jumping again? (Who bought Bear Stearns all the way to the bottom? When was it a good buy?) And if you are non-local with children, how you can buy when you were on a plane out of here and weren't sure if you had a job? I understand hsbc main building mortgage floor was empty at that time (the only time the bankers were wearing the masks?). Will it be different next time (assuming there is a next time in our lifetime)? What is different?


And for investors: who cares what last month's price was, unless you bought at that price, what is today's valuation of the property? If you can't value the property, isn't that called "speculating" not investing?

One thing you can count on with HK investors, when the S#$% hits the fan they all run for cover! Be in a position to buy. During SARS we could raise enough cash as we had just landed and there were no other lending vehicles in place to offer low front end transactions. Now the bank will give you 95%, throw in some cashback, roll upto 1M+ into reno's at same rate amortization and now offering even to throw in stamp duty deferral. Hmmm, homes are not selling, rates are low, banks throwing everything at us, the is an opening for a correction either on recession fears or greed over loosing those sweet gains since 2003 2004 2005 or just recently. Patience and Positioning my friends.