Like Tree75Likes

HK Property Down 11% YOY

Closed Thread
Page 6 of 9 FirstFirst ... 3 4 5 6 7 8 9 LastLast
  1. #51

    Join Date
    May 2006
    Location
    Pampanga, Philippines
    Posts
    29,763
    Quote Originally Posted by D.YU:
    if sentiment is the key factor, then prices will continue to fall. The pandemic had the opposite impact, ultimately caused inflation. So with political situation continue to stabilize for the worse, I cannot see sentiments helping.

    I dont see real estate booming back up 15 to 20% anytime soon. But put your money where your mouth is and buy!
    Have you changed your view from post #7 when you stated it was hard for HK prices to fall?

  2. #52

    Join Date
    May 2021
    Posts
    1,733
    Quote Originally Posted by traineeinvestor:
    FWIW, although HK residential property prices have come back quite a lot from their most recent high-water mark, they are not sufficiently attractive to induce me to buy again (even if I wasn't focused on an overseas investment completing in 2023 anyway).
    And to add to that Interest rate does matter, it did matter in 1997 and it will always matter if it remains elevated for over a year or two..
    traineeinvestor likes this.

  3. #53

    Join Date
    Dec 2010
    Posts
    1,523
    Quote Originally Posted by hullexile:
    Have you changed your view from post #7 when you stated it was hard for HK prices to fall?
    My narrative still stands regarding RE in HK is still over valued even at 10-15% adjustment. I have been window shopping on a DAILY basis for the last 6 months. I have been trying to map out a clearer image of the reality of the market. As I said, the overall market should be grim and down but asking prices and sold prices are still relatively high (not as significant as many experts have mentioned ie. over 15%).

    One thing I am certain is majority of the landlords are greedy and not in a rush to sell. The asking price is quite ridiculous and some even above the peak $/sqft. This includes newer builds and 40+ year old complexes. Hell even HOS asking prices are barely down.

  4. #54
    Quote Originally Posted by D.YU:

    One thing I am certain is majority of the landlords are ... not in a rush to sell..
    Given that banks generally require buyers to put down 30-50% deposits and almost all mortgages in Hong Kong are P+I for 20 year terms, most landlords have very high levels of equity. HKMA data supports this. For the same reason, even shoving interest rates up to 6-8% will not be an issue for many.

    There will, of course, always be some who are affected by some combination of job loss, or other personal circumstances or who borrowed using second mortgages etc who struggle with rising interest costs. Likewise, there will be some who believe that the market will fall a lot further and wish to cut their losses. But they will be a minority.
    shri, D.YU and hullexile like this.

  5. #55

    Join Date
    May 2021
    Posts
    1,733
    Given that banks generally require buyers to put down 30-50% deposits and almost all mortgages in Hong Kong are P+I for 20 year terms, most landlords have very high levels of equity. HKMA data supports this. For the same reason, even shoving interest rates up to 6-8% will not be an issue for many.
    One issue with HKMA data is it only shows aggregate information, there is no way to know how many landlords own multiple properties through various loopholes/relatives etc and 3rd/4th property is usually for speculation riding on sentiment, when interest rate goes up and rental payment is not sufficient enough to pay the installment, landlords usually prefers to take haircut and cut down losses on 2nd/3rd/4th property even though they have sufficient equity invested in the property.

    Anecdotally, i would divide such landlords in two cateogoris, first generation veterans who have almost paid up all properties or refinanced but could easily manage 6-8% interest but in last 7-8 yrs i have seen plenty of second generation wannabes who have leveraged on first/second property to put in enough equity in 2nd/3rd etc, this group will come under much pressure..

    In fact i would go as far as to guess vetrans have stopped investing more in HK properties a while ago (dont go far, look in the mirror ) so market is full of more wannabes lately which HKMA data does not reflect accurately..

    Perhaps There is this third category as well, Cartel's subsidiaries and internal sale type gangs which swallows primary pre-sales, artificially dries up supply and create more demand, This gang has much more holding power and immune to interest rates..

    And also fourth category of mainland landlords owning multiple properties (Plenty in my estate), really hard to predict how they would see new environment and react depending on individual circumstances..
    Last edited by ndt; 06-12-2022 at 11:19 AM.

  6. #56

    Join Date
    Dec 2010
    Posts
    1,523
    Quote Originally Posted by ndt:
    Anecdotally, i would divide such landlords in two cateogoris, first generation veterans who have almost paid up all properties or refinanced but could easily manage 6-8% interest but in last 7-8 yrs i have seen plenty of second generation wannabes who have leveraged on first/second property to put in enough equity in 2nd/3rd etc, this group will come under much pressure..
    Anecdotally, last year I was flat hunting (rent) for 40-50 year old flats. One of the flat is owned by 70+ year old couple. The LL had the audacity to tell me he bought the flat when it was NEW for around 200k. Yet, the mother fucker wont even budge a few hundred on the 24k rent. Literally his return on investment is astronomical already. Needless to say I was not interested in a signing a lease.

    I can only imagine these types of landlords still make up a good chunk of the market. They have literally 0 debt on the flat and always aim to make top dollar even if it means having a vacant flat longer. I can only see $$ in these peoples' eyes.

  7. #57

    Join Date
    Nov 2005
    Location
    Cramped island
    Posts
    5,585
    Quote Originally Posted by D.YU:
    Anecdotally, last year I was flat hunting (rent) for 40-50 year old flats. One of the flat is owned by 70+ year old couple. The LL had the audacity to tell me he bought the flat when it was NEW for around 200k. Yet, the mother fucker wont even budge a few hundred on the 24k rent. Literally his return on investment is astronomical already. Needless to say I was not interested in a signing a lease.

    I can only imagine these types of landlords still make up a good chunk of the market. They have literally 0 debt on the flat and always aim to make top dollar even if it means having a vacant flat longer. I can only see $$ in these peoples' eyes.
    technically return should be valued at the impending value of the house, and not really related to how much he bought it years ago..
    why should he share with you the lower than market value incentive for a right move he made years ago ?
    traineeinvestor likes this.

  8. #58

    Join Date
    Dec 2010
    Posts
    1,523
    Quote Originally Posted by freeier:
    technically return should be valued at the impending value of the house, and not really related to how much he bought it years ago..
    why should he share with you the lower than market value incentive for a right move he made years ago ?
    No argument there. But his asking price was above market.

    I am just saying there many LL who bought decades ago and have 0 debt. Hence no urgency to "reduce" to get rid of their asset.

  9. #59

    Join Date
    Nov 2005
    Location
    Cramped island
    Posts
    5,585

    I think the big key question on property is how interest rate will hold in the longer term. last few years of extremely low interest rate got many people thinking property prices will never fall.. and trainee said it right from an owner perspective. But remember, transactions are pulled off by the marginal seller/holder.. as long as enough people sees the need to sell their property to conserve CF or remain solvent, then property market correction is likely to continue.


  10. #60

    Join Date
    Nov 2005
    Location
    Cramped island
    Posts
    5,585
    Quote Originally Posted by D.YU:
    No argument there. But his asking price was above market.

    I am just saying there many LL who bought decades ago and have 0 debt. Hence no urgency to "reduce" to get rid of their asset.
    in an illiquid market i would say that is quite nasty. but hk property market is so liquid and so much supply elsewhere.. if he chooses to forgo a few months of rental to stick to his price then that's his choice.. but i kind of suspect these guys prefer to rent to guys they want to rent to.. instead of strictly based on price.

Closed Thread
Page 6 of 9 FirstFirst ... 3 4 5 6 7 8 9 LastLast