View Poll Results: Hong Kong Property Bubble burst - 2011

Voters
50. You may not vote on this poll
  • There is no Property Bubble

    9 18.00%
  • May burst by end of 2011

    8 16.00%
  • May burst by end of 2012

    17 34.00%
  • May burst by end of 2014

    3 6.00%
  • May burst by end of 2016

    3 6.00%
  • No Clue - Try your luck by investing !!

    10 20.00%
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Hong Kong Property bubble

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  1. #1

    Join Date
    Jul 2010
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    342

    Hong Kong Property bubble

    Just read a news that during recent property auction at Hung Hom (Apr 2011) there were many protesters shouting to stop Property Bubble. I think they are not wrong, this bubble may push HK again back to 1997 scenario

    Last edited by PKS_2000; 29-04-2011 at 11:55 PM.

  2. #2

    Join Date
    Oct 2006
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    4,907

    In 1997, the northern neighbors were not oozing with money and coming down here in droves to buy properties... I talked with an agent the other day and he estimated that about 20% of new flats in a nearby new development were owned by mainlanders.

    Combine that with low interest rates and it's not likely to crash anytime soon. However when the rates start rising, the market will slow. The US doesn't appear to want to raise rates too much but things like a run on the dollar could force their hands. HK has very little control over this so we'll just have to wait and see...

    Football16 likes this.

  3. #3

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    Jun 2010
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    Quote Originally Posted by gilleshk
    In 1997, the northern neighbors were not oozing with money and coming down here in droves to buy properties... I talked with an agent the other day and he estimated that about 20% of new flats in a nearby new development were owned by mainlanders.

    Combine that with low interest rates and it's not likely to crash anytime soon. However when the rates start rising, the market will slow. The US doesn't appear to want to raise rates too much but things like a run on the dollar could force their hands. HK has very little control over this so we'll just have to wait and see...
    I was at that new development in Hung Shui Kiu a few days ago, the name of it escapes me for the moment. Same deal, they want nearly 4m for 700sqf and in Hung Shui Kiu? Interestingls, my wife reckons the marketing is being aimed squarely at mainlanders and the ease of getting to and from the mainland. There's a lot of talk about a new MTR/Westrail station there and some kind of high speed rail link with Shenzhen. If those go ahead it could be happy days for the folk of sleepy Hung Shui Kiu...

  4. #4

    Join Date
    Mar 2011
    Posts
    314

    Protesting about property prices is not new. In Paris for many many years, some people have protested about prices. So stupid these people, to think their protest can change a property price. And now in Berlin you have the same nonsense, with people doing naked protests in apartments offered at rental prices they consider too high. Quite amusing, and an enjoyable protest to see (especially if the protesters are attractive and female) but rediculous all the same. There is so much money about in HK, and coming in to HK, that I really think people here are generally quite well off. They all of course aspire to larger properties, and foreigners are investing here too, among locals and mainlanders, so the prices must continue to go up and up.


  5. #5

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    Nov 2010
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    mid levels
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    30

    [QUOTE=They all of course aspire to larger properties, and foreigners are investing here too, among locals and mainlanders, so the prices must continue to go up and up.[/QUOTE]

    yes, of course...
    they must continue to go up and up forever...
    cause that's what always happens....:0


  6. #6

    Join Date
    Oct 2003
    Posts
    2,257

    Well protesting about property prices per se doesn't make much sense. Protesting about government policies and interventions in the market which keep property prices artificially high however, does, and that's primarily what people are doing. People are not unhappy simply that prices are high but rather that they feel that prices are high in large part due to government/property developer collusion. Particularly since they have no democratic means to oust a government which they feel is not acting in the interests of Hong Kong people it seems to make sense for them to protest.

    You may disagree with their analysis of the property market but I don't see how the protests about government/developer collusion in the property market are ridiculous per se.

    Skinnypupp and Bojak83 like this.

  7. #7

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    Mar 2010
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    5,292

    situation is it is really hard to predict the life time of a bubble, usually it is way longer than people would expect ( or hope )


  8. #8

    Join Date
    Oct 2010
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    1,114

    Prices will likely keep rising. There is so much cash from china sloshing around. And USA is continuing to extend low interest rates. Indeed to preserve the value of your cash and stop it being diluted one could argue that the worst thing to do is save cash right now. Rather u need to be invested in something. And with property u get good leverage so it's a nice asset to buy to protect and enhance your wealth.


  9. #9

    Join Date
    Mar 2006
    Posts
    4,017

    Nothing goes straight up whether it is equities or housing prices and there are cycles in housing the world over. If there is a recession or other financial or event like SARs it can affect prices. Vancouver at one time had a glut of new flats for sale in apartments that coincided with a severe recession and that was devastating in 1981 including loss of homes for many. Nothing as bad is likely to occur there again but over night home prices were cut in half.

    While at the height of the housing market you get your best price - you are also likely buying back into the same situation.

    Not sure Dipper is right about the connection to democracy as electing gov'ts or not does bear on housing prices. I can vote out my local gov't but the tax assessments notices keep rising each year as they value the homes higher.

    Policy does have a bearing of course and in HK there is no doubt there is a huge influence on policy that works well for developers as does the fact that there is not a large land base of available building sites.

    I always wonder how much or if there is a distortion in the market given the gov'ts tax favour of housing allowances and how many housing units in public housing is not in the market at all. I have no idea if these distort the market but when I see high rents that far exceed common sense for what they are getting I can only surmise that this is provided by the employer and is taxed at a lower rate by the Revenue dept.

    Certainly elected gov'ts in North America have found - especially in the suburbs of Canada - that the only way to get new revenues to pay for new needs or refurbish aging infrastructure is to develop new properties and increase the tax base - long term it adds costs but this how they do it. Keep adding single family housing as businesses flee to lower cost areas or close down.

    Last edited by Football16; 30-04-2011 at 01:14 PM.

  10. #10

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    Oct 2006
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    4,907
    Quote Originally Posted by dipper
    Well protesting about property prices per se doesn't make much sense. Protesting about government policies and interventions in the market which keep property prices artificially high however, does, and that's primarily what people are doing. People are not unhappy simply that prices are high but rather that they feel that prices are high in large part due to government/property developer collusion. Particularly since they have no democratic means to oust a government which they feel is not acting in the interests of Hong Kong people it seems to make sense for them to protest.

    You may disagree with their analysis of the property market but I don't see how the protests about government/developer collusion in the property market are ridiculous per se.
    When in doubt...blame the government/lack of democracy... What exactly is artificial about a cyclical market? What's a "natural" price? If the government intervenes to bring price down, that's not artificial? What do most governments do when markets start going up? A whole lot of nothing... Someone mentioned the Vancouver market which has gone up tremendously in bursts since 1986, the government never intervened. A civil servant living in Vancouver makes essentially the same as one living in Ottawa but has to contend with prices that are twice as high yet Canada calls itself a democracy.

    The government introduced measures earlier this year to cool the market and people complained... Many people are happy to see properties rising, the trick is to maintain steady growth without having a so called bubble and avoiding a crash. Too much intervention and you create the problem you are trying to avoid in the first place...

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