| tvrlover - I own property in China, both southern and northern as the returns are much higher in that market than HK in regards of the amount invested. All my properties are cash paid so I can get a good real return without having to pay banks any of my profits.
Min 25% asset increase PA with a rental return of 7% net
Its irrational for us to buy here as we move a lot. 2006 was spent in Northern China and 2008 may reveal a move to Macau or at least continual back and forth.
I was a property developer in the UK before moving here also and like to see my money go into high profit projects, not sitting on something that moves up and down with the tide. I have never held onto any property for more than two years. My rental returns from the mainland + the items I still have in the UK means I can essentially live here for free whilst gaining a great % on the established assets. We all have our own strategy and each to his own.
My comments are made because the data just not support the theory.
FYI - my wife is a property consultant here so I have ( at last ) access to information and opportunities on an inside track. Maybe we WILL buy this year as the projected rate drop will provide an opportunity if we can find a good fixed rate financial product to hitch our wagon to. ALSO we are selling our properties on the mainland ( starting in March ) in what we feel in the " last hurrah " of the property boom for a while. The cash has to go somewhere other than fixed term deposits.
HK'ers could almost also be called property geeks. There is nothing they do not appear savvy too. Even the most uneducated have a real good grasp of what property or land is worth. Thats why we have found in the past it almost impossible to get a good deal or get into a situation to turn a property and realise a good margin in the time between trough and peak. Your friends idea of buying property on high APR loans is not uncommon and should be avoided, as you say. NOW, for us, its different and we have access to situations where its possible to do, what I did before, with acceptable margins, in new and high sought locations for less than a million USD. This market turns at around 20% net which fits my strategy.
As I said - each to his own BUT understand the market first.  |