[tvrlover]

HK stock market is already undergoing a correction, dropping from an all time high of almost 32,000 to about 21,000->24,000. Expect the market to level out at about 20k (wiping out the gains for the past year).

After the Beijing Olympics this year, expect HK real estate prices to be corrected at about a 15-20% rate. I will be buying right about the time the prices drop 20%+/-, since that's the time to hedge your bets.

Right now, the market is extremely overpriced, so wait for it to drop about 20% this year or start of next and buy. It is possible we will see a drop of 30-50%, but not as likely as my 20% correction.

[Boris]

Originally Posted by tvrlover

HK stock market is already undergoing a correction, dropping from an all time high of almost 32,000 to about 21,000->24,000. Expect the market to level out at about 20k (wiping out the gains for the past year).

After the Beijing Olympics this year, expect HK real estate prices to be corrected at about a 15-20% rate. I will be buying right about the time the prices drop 20%+/-, since that's the time to hedge your bets.

Right now, the market is extremely overpriced, so wait for it to drop about 20% this year or start of next and buy. It is possible we will see a drop of 30-50%, but not as likely as my 20% correction.

Great to see there are still inhabitants on Fantasy Island !!!

[Meerkat]

[quote=tvrlover;199363.....Beijing Olympics this year, expect HK real estate prices to be corrected at about a 15-20% rate. I will be buying right about the time the prices drop 20%+/-, since that's the time to hedge your bets.

Right now, the market is extremely overpriced, so wait for it to drop about 20% this year or start of next and buy. It is possible we will see a drop of 30-50%, but not as likely as my 20% correction.[/QUOTE]

tvrlover, I have heard that some investors are moving to property precisely because of the stock market instability if this is the case your theory could be tested.. what do you think? - 6 months is lot of growth to miss in this property market, especially if compared to the last six months [hostorical performance is not an indication of future perf. etc etc..]

[KnowItAll]

tvrlover : depends on what part of the sector you're looking at. In the 1000 sq ft+ range, the market equations are different, because of the supply issues.

Don't expect property in the 1500 sq ft range to drop as much as say, property in the 800 sq ft range.

[Boris]

Originally Posted by Meerkat

tvrlover, I have heard that some investors are moving to property precisely because of the stock market instability if this is the case your theory could be tested.. what do you think? - 6 months is lot of growth to miss in this property market, especially if compared to the last six months [hostorical performance is not an indication of future perf. etc etc..]

Now there are two people on Fantasy Island. Tvrlover has someone to talk to about this fantasy.

The property market in HK is not " Olympics " driven so you have a long long wait my friend.

HK market is driven by a) availability b) location c) lending rates d) the general economy. On the mainland, the situation is different and people should not be confused between the two. If you have property in Qingdao or Beijing maybe you are near the top of the market.

Here there is limited availability, location is self explanatory, lending rates are super low with a further reduction in the works for March and the general economy is very nice thank you. Even with the HKeX up and down like a Wanchai hookers panties.

One country yes, but more importantly, two systems . Remember the historical fact of the last property devaluation of any significant % and prey for a major bird flu epidemic or a return of SARS.

[Boris]

Originally Posted by KnowItAll

Don't expect property in the 1500 sq ft range to drop as much as say, property in the 800 sq ft range.

A very recent survey by the EAA briefed all agents that the market for 600sq ft and below ( throughout HK ) was very undervalued and consequently is expected to have double digit growth in 2008 / 9.

Even here in NT, owners are revaluing on a monthly basis and even changing the price between ( or during ) prospective buyers visits.
The " mews " area alongside the Beverly Hills complex ( 700sq ft to 2100 sq ft / 3 floors ) has risen 20% in the last two months alone with sellers not budging on price.

Lots of buyers also but very few completions.

[KnowItAll]

Boris - the lower end of the market will have double digit everything .. rises and falls in my opinion.

[tvrlover]

Originally Posted by Meerkat

tvrlover, I have heard that some investors are moving to property precisely because of the stock market instability if this is the case your theory could be tested.. what do you think? - 6 months is lot of growth to miss in this property market, especially if compared to the last six months hostorical performance is not an indication of future perf. etc etc..

IMO, Hong Kong market doesn't have a lot of reasonable transactions. Let me give you an example , I go to a small restaurant (no names); in the restaurant the average waitress earns about 10,000 HKD/mo. on the high end scale. ALL of the girls there have invested large portions of their income into the stock market, with absolutely NO knowledge of what's what. They see others do it, and they follow (monkey see, monkey do). When the market starts falling more, these girl wont know what hit them and will sell big time (about 1/2 of them already lost $ in the last correction).

I find the stock market is strongly connected to consumer confidence and other prices in HK, including real estate. Thus, if we see more corrections in the stock market (especially with the failure of the US economy), we will see a lot more panic in other markets. It's all related, especially in HK...

[tvrlover]

Originally Posted by KnowItAll

tvrlover : depends on what part of the sector you're looking at. In the 1000 sq ft+ range, the market equations are different, because of the supply issues.

Don't expect property in the 1500 sq ft range to drop as much as say, property in the 800 sq ft range.

Size and quality of the property will play a big role in the market shifts, 100% agreed. Just like in California right now, you see some places dropping 19-20%, while other areas (just 20-30min away) dropping only 1-2%. In HK, quality of the inventory drives the pricing; especially with the limited quantity available.

We'll just have to see what happens with the stock market and how it reflects the economy...

[tvrlover]

Originally Posted by Boris

Now there are two people on Fantasy Island. Tvrlover has someone to talk to about this fantasy.

The property market in HK is not " Olympics " driven so you have a long long wait my friend.
.

May I ask, how much property do you own in Hong Kong? and in what locations and for how long. Just curious what you base this on.

I've had property in HK since early 90s, and have purchased on defaults in 97 and so on. I base my suggestions on experience, not a magic ball. Fantasy Island is closer then you think, since the global economy is very much connected. A drop in the USA stock market/real estate market + increase in inflation, along with a possible drop in the Chinese stock and real estate markets (including inflationary pressure) will heavily influence the Hong Kong market.

The attitude in Hong Kong is always irrational and bullish when there are such positive jumps in property prices. Many of the current investments are based on pure speculation, not logic or reason (not much of that in HK investments). A friend of mine invested in Sai Wan Ho property using his credit cards and personal loans, hoping the property price would go up and he could flip it (absolutely no logic). He was lucky and the jump in property prices saved his 20%+ monthly interest cost, but if the market was in any type of downswing (even a few %) he would have to pull out and go bankrupt. He's not the 1st or the last of this kind of investor in HK -- trying to get rich real fast. There are many of these guys who will end up driving property prices down based on their foolish speculation.

Since I love HK, let's hope I'm wrong and we keep seeing a bullish market with plenty of jobs and wealth being created. But, realistically, every bubble in history of capitalism has burst - at one time or another. Expect this real estate bubble to go the route of every other bubble in history.