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24-03-2019, 11:34 AM #1
Real Estate comeback or dead-cat bounce?
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24-03-2019, 11:41 AM #2
It all depends on the economy. If markets wobble, then a dead-cat bounce.
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24-03-2019, 11:50 AM #3
Any buzz on who lost that huge deposit mentioned in the article?
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24-03-2019, 11:51 AM #4
It's just the market squeezing the supply when demand is lower, you can see how the number of transactions decreased a lot recently. With Dada Xi hitting on money laundering there is also less demand coming from mainland.
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24-03-2019, 12:07 PM #5
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24-03-2019, 12:10 PM #6
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24-03-2019, 03:16 PM #7
Its difficult to know what's going to happen. Even if your property doubled in value. It's not like you can sell it unless you wanted to leave HK.
I've been looking closely at several buildings. And you'd see a recent transaction then all the landlords add 20-25% and now list their property on the market for sale. The owner has to play the waiting game. After not being able to sell, do they rent it or decrease the price. They reduce the price 10% then the media says the HK property market is in freefall. But if you check one building there are single digit transactions in the last 5 years and ultimately even with the discount and a further discount, you'd be the buyer who bought the highest priced unit for that building.
Usually once you target an area that you want to live, you basically have 10-20 buildings/estates to choose from, then add your requirements of having pets, carpark and facilities, you further narrow it to almost 5 estates.
Check out those 5 estates, you see a few units for sale at each, all at 20% higher than the recent transaction which is already ultimately high. But if you further dig, you'll see those landlords have been trying to sell for years and before any unit actually sells, the landlord reduces the price considerably usually at least twice. Then a transaction occurs.
On top of all that, your choices are either a 50% down payment on a 30-40 year old building. Then what problems will come with owning that. Then there are the developers who offer new estates, better facilities and higher management fees with lower down payments.
Anyway the flat hunting process is a bit of a nightmare. I can see where some of my fellow posters dislike HK for this. I guess I've been lucky having a newer estate albeit not what you'd call a central location.
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24-03-2019, 03:54 PM #8
MandM good input. To add to your points I think it's crucial to have a good relationship with a few property agents who are senior in the game and have a lot of contacts. The problems are these people are usually Chinese and they are mainly interested in building that relationship with you if you have a lot of money and given them business in the past.
What they can do for you is when markets are really weak and there are few buyers. They will dig out those few people that are forced sellers and bring forward those deals to you. If you then have the cash you can low-ball the bidding quite a lot and the seller will most likely accept.
Opposite when the market is hot and you are sitting on a property, which do not necessarily need to have out for sale. They will contact you about a specific buyer, that is looking for exactly your type of flat and is willing to pay. This is when you can get really those top dollars selling. This requires you to have an asset which is somewhat special though, not floor 6 in a mediocre building.
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24-03-2019, 05:46 PM #9
A lot of owners in Hong Kong are reluctant to sell because of the double stamp duty – as an investor the market has to fall a long way before you can buy back in and be any better off.
Looking at the HKMA mortgage data and adding a bit for the non-bank finance which is also used (an uncertain amount but certainly relatively small in both absolute and relative terms) the very high level of equity most HK property owners have in their properties means that it will take a big fall in the market before more the existing trickle of forced sales generate bargains.
The combination of disincentive to sell + lack of need to sell + poor value proposition explains the relative thinness of the secondary property market in HK.
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24-03-2019, 06:05 PM #10
feels like the market is coming back which is a bummer as it means i can't buy a proper place.
rates on hold, benign economic environment for now = rocket under real estate prices again.
maybe will start falling if we get into a global recession (if/when). but with the Fed on pause now and next move likely down, just feels very supportive for HK house prices unfortunately.
interesting quote here - im part of the the 2012 arrivals so qualify for PR this year. had the same idea to potentially buy a place.. so can certainly resonate with her comments.
"A substantial uptick in demand may also come from a large pool of Chinese mainlanders who have lived in the city for seven years and will qualify for Hong Kong permanent residency this year, which will exempt them from the extra taxes levied on nonresident property buyers, Ms. Wong said."
Originally Posted by Plutark:
