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  1. #181

    Ray wants to people WORDS in my mouth.
    I wish he could simply stick with what I say, then the discussion might go somewhere

    Ray:
    "To put it in simple terms, you are saying price rises are because of increasing rent levels and ample liquidity and the returns by from rent are in excess of the financing costs causing more investors to buy for rent."
    Nope.
    The point is this: People who buy property will look closely at both rates and property yields. If Rates are above Net Yields, then investors need to SUBSIDIZE their yields to pay interest. I would regard that as speculation: ie they are paying for a bet on future capital gains.
    Ray:
    "
    the fault with your argument is that it assumes that most property investors don't consider capital gains which is a load of bollocks..."

    Again. I never said that.
    Instead: Yield pick-up and Capital gains are both on the menu now. And it makes sense to buy when you EXPECT to get both. Betting only on the capital gain is dangerous, since this situation usually comes when the market is dangerously high. If prices then reverse to the downside after such point is reached, then investors would have BOTH: negative cash returns on any money they borrowed, and capital losses.

    I DO AGREE with those who say rents are too high, and the HK government should aim to get more SUPPLY into the property market. That seems to be a high priority now, but there were too many years where supply lagged demand, which is why Rents are so high now.

    Last edited by OffThePeak; 10-03-2015 at 09:16 AM.

  2. #182
    Quote Originally Posted by ray98:
    ...The only fair way of surgically removing the speculation value is to tax all capital gains and kill the speculative element and hopefully wage rises will be at a faster rate to make homes more affordable.
    It is silly to push for something that will never happen.
    I think if you polled the whole population of Geoexpat readers, not just the handful who post here,
    I believe you would find a majority would find such an idea to be naive and reckless.

    The HK govt almost certainly believes that

  3. #183

    Re; PROPERTY CYCLE Comments:

    (Wayland sent me a link to a 5-year old thread where I made some posts about Property cycles. Which I have looked at carefully):

    My comments then, seem to be consistent with what I have posted on Geoexpat.
    I did sell some properties 5-6 years ago, to get rid of my debts, etc
    Did he miss this?
    (End of Post #15, on the old thread from 5 Years Ago):
    "Eventually, I want to be cashed up and ready to buy HK property again, but probably not until sometime in 2011, when I think HK property prices might be 15-20% lower. If I am right, we will both find ourselves bullish on HK when others have lost faith after a good selloff later this year and into 2011.

    My own cycle work on Long Term cycles suggests the final top in HK property may not come until 2015-2017. So a deep selloff coming when global rates rise might be something to welcome. But I want to buy when prices are low and people are fearful, not when yields are low and people are complacent."

    = Unquote =

    In fact, a dip did come, but it was less than expected. I found a property in early 2013, which my partner wound up buying in Jan. 2013 (she was born in HK), rather than me in my name, which would have required higher taxes.

    Last edited by OffThePeak; 10-03-2015 at 10:29 AM.

  4. #184

    Join Date
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    Quote Originally Posted by OffThePeak:
    Re; PROPERTY CYCLE Comments:

    (Wayland sent me a link to a 5-year old thread where I made some posts about Property cycles. Which I have looked at carefully):

    My comments then, seem to be consistent with what I have posted on Geoexpat.
    I did sell some properties 5-6 years ago, to get rid of my debts, etc
    Did he miss this?
    (End of Post #15, on the old thread from 5 Years Ago):
    "Eventually, I want to be cashed up and ready to buy HK property again, but probably not until sometime in 2011, when I think HK property prices might be 15-20% lower. If I am right, we will both find ourselves bullish on HK when others have lost faith after a good selloff later this year and into 2011.

    My own cycle work on Long Term cycles suggests the final top in HK property may not come until 2015-2017. So a deep selloff coming when global rates rise might be something to welcome. But I want to buy when prices are low and people are fearful, not when yields are low and people are complacent."

    = Unquote =

    In fact, a dip did come, but it was less than expected. I found a property in early 2013, which my partner wound up buying in Jan. 2013 (she was born in HK), rather than me in my name, which would have required higher taxes.
    Sorry for my simple mind. So in brief: 5 years ago you predict there will be a dip somewhere 2011 and you slightly miss it as it had happen in 2013 and with (rather quite) offset since the dip was only a minor one. Is it correct?

    Then now you say that there will be another dip (BIG one) around 2016-2018. Where is the 16 years cycle then?

    Really confused.

  5. #185

    Why confused?
    Are these words from 2010 not crystal clear?:
    "My own cycle work on Long Term cycles suggests the final top in HK property may not come until 2015-2017."


    The MATH is the same Now as it was 5 years ago, and even 8-10 years ago, when I first started writing about it.

    Many people expected a dip in 2010-2012, and we got one.
    It was more like 10%, depending on the index. Not the 20-30% that some, including me, had expected for a few months at the time. Of course, I adjusted my thinking fairly soon, when rates did not rise much, and HK property held.

    The dip we saw in 2008-2009 was the "MId-cycle" dip that the 18-year cycle calls for (though it came a bit early off a 2003 low.) Expecting a rise in rates, which was widely predicted at that time, would push down HK property, and correct some of that big rally from the 2009 Low, was a wrong forecast that was shared by many. - That forecast of many was not coming from the 18 year cycle at all. It was based on other thinking which proved to be wrong eventually. So what?

    The 18 Year cycle has worked well in many markets, including Hong Kong. Why try and twist my words, to make that seem untrue?
    ====
    Here's a summary of how forecasters were adjusting their predictions back in 2010 when we first got a whiff of higher rates:

    TOM HOLLAND's WARNING - for Business in Asia - SCMP's Monitor
    Don't get in the Way, it's a stampede for the exits

    + If Europe's banks sustain big losses on their US$2.8 Trillion of PIIGS govt. debt in the event of a sovereign default, they will be forced to cutback on their lending to other parts of the world, including Asia,
    + In 2008, developed world banks reduced their exposure to Asia by almost US$300 Bn, with devastating impact
    + Europe a big customer: Asian cores supplied 42% of the EU's total import demand, 2/3rds of which is electronic gadgetry. HK is especially vulnerable, with 12% of goods shipped thru HK.
    + Asia's FX reserves will cushion the blow, but company profits (and jobs!) will be hit
    ...Meantime...
    HK Property agents are changing their forecast to "No Growth":

    Forecaster-- : - Old - : New Forecast
    Credit Suisse : + 10% : -5-7% in 2 mos.
    JonesLangLS: Higher : Sideways
    Knight Frank. : Higher : Sideways
    Midland Rlty. : Higher : Lower
    UBS, Nomura : Had big increases, that they did not revise

    Last edited by OffThePeak; 10-03-2015 at 03:30 PM.

  6. #186

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    Oh okay, my mistake. It was between 2015-2017 and now 2016-2018. Understandable.


  7. #187

    Here's my suggestion, Mobtrio:

    Make loads of forecasts, mostly accurate over 8-10 years on various forums, explaining how an 18 year property cycle works in some detail:
    And write with clarity over years how that 18 year cycle "should" peak in 2015-17 - including these dates in many forecasts starting in 2006 or earlier.

    Come back in 8-10 years, and I will troll through everything that you wrote for a brief prediction that went wrong, and post on your thread exactly the language that you have posted on this popular thread I have started here.

    (I deleted the rest, when you edited your comment)

    What threw me (in my 2010 prediction) was the Mid-cycle dip usually comes about 5-7 years into the 14 year upswing rally, and I expected a double dip (on a brief rise in interest rates) so that the Mid-cycle correction might look like a double bottom, or would be substantially retraced- with the second dip ending in 2011. That's what my "dip" idea was based upon. Clearly, we did not get that... perhaps because we did not get a spike in interest rates in 2010-11. Had we seen a jump in rates, we might have seen a second dip, retracing much of the rally from end-2008.

    If we count 6-7 years from the end 2008 Low, as the duration of the second upleg, that would take us to end 2015-2016 as the expected Long Cycle peak.

    The cycle does not have that much precision, so take this merely as a rough guide.

    Here's a Video where the Cycle is explained:
    Introduction to Fred Harrison's 18 Years Cycle
    https://www.youtube.com/watch?v=_C-Nd_MStxU
    Description dated : Jul 24, 2008
    Is there a property crash every 18 years? Fred Harrison thinks so. In his book: Boom Bust, House Prices, Banking and the Depression of 2010, Harrison describes a cycle of 18 years. If he is right, we are headed towards a Depression by 2010, and it will be many years before those who bought at the peak will be back to even. This is the introduction to the cycle. Other videos look into historical prices in more detail.

    Last edited by OffThePeak; 10-03-2015 at 03:48 PM.

  8. #188

    This chart might help to clarify the Long Cycle I have been writing about


    Note: the mid-cycle low seems to have arrived a bit "early" with reference to the 2003 LOW.
    That was one reason that I expected the dip starting in late 2009 to develop into a larger correction. and maybe even a Double Dip. It did not happen that way, and it took a few months to realize the Mid-cycle Low was already in place.

    Last edited by OffThePeak; 10-03-2015 at 04:23 PM.

  9. #189

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    Huh, did I make something wrong? I said it is my mistake and I can understand the 1-2 years shift.

    (I deleted the rest, when you edited your comment)
    And where did I edit my post?

  10. #190

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    offthepeak, you have focussed on the current cycle but how well does this 18 year cycle hold up in HK over say the past 90 years (5 cycles)? How many cycles can you go back?


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