Reply #17 DArtagnan's post
Buy buy buy!
There's a significant difference between the US and HK property prices. Whereas the US realty boom was driven purely by the bank's incessant desire to boost its loan figures by lowering its financing standards where even a strawberry picker in California can own a USD800,000 home and a stripper in Las Vegas can own 5 apartments and then repackaging the mortgages to institutions that have no idea what they are buying and passing it off themselves like a game of hot potatoes, Hong Kong's realty boom is driven by a much scarier but predictable force, the powerful RMB. Unless Hong Kong restricts the flow of Mainland Chinese investment into HK property, the land in Hong Kong will only continue to go up.
There's 1.3 billion people in China. Let's use the figure of around 1% who are USD millionaires. That's still 1.3 million people in China who are USD millionaires. A lot of these 1.3 million millionaires would want to come down to HK, because it's the easiest way to getting a passport that allows them to travel freely around the world, and also the easiest place to get their RMB out of China. That 1.3 million people would increase HK's population to over 9 million people, making up 14% of the population. These people as well would all be focusing in on the >HKD6 million apartments so definitely anything above that range would certainly go up in price. Then there's the trickle down effect, whereby all those HK people that used to be able to afford the apartments that are now at >HKD6 million, they start buying up the HKD4 million apartments, and etc.
The only possibility of the HK market going down would be:
1) HK government restricts Mainland Chinese investment
2) China government opens up travel policy
3) Free float of RMB in international market
4) HK government colonizes the Senkaku islands and starts building up 1.3 million flats there.
Disclaimer: I bought last year when I thought the market was quite high, but it's gotten even higher since. Goes to show, don't try timing the market.  | |
