atomic3d / geoduck

The lower the better of course but i am (hoping) for an apartment for about USD$ 400 to US$ 480
Would TST be a good place to buy though as i know that HK island (Sheung Wan) will be either much more expensive or less sq.ft for that price
What would be the first things that you would do in terms of 'homework' in to knowing how to get the best deal and such..
I do know about centadata and can look at the history of a property, but what else is important?

Luckily I got on the ladder as soon as I came back from London about 4 months ago...prices were still high but its grown since then.

Agree with all the bros in saying whilst interest rates are low, they only now offer 60% mortgages, plus the repayments will have to be shown to be at the most 1/3 of your salary.

I think in HK the way to view the market depends on whether speculators are still buying (as they play the margins), if theyre not willing to take the risks then they probably sense a dip or lack of growth. The ones who are always hardest hit are first time buyers, as they fear they will never get on the ladder and end up paying too much, get into negative equity etc.

I don't know much about TST but judging by places in West Kowloon like Hermitage and other similarly corny named developments, going for in excess of HK$12,000 p/sqft, its pretty crazy. I do see potential in Sai Wan and Sai Ying Pun area, just cos there will at least be capital growth when the mtr links are built. Could be a few years though.

TST is a good place to buy if you don't mind there are toooo many people on the street and noisy, specially on big holiday, like xmas time, but you can go and buy many things very convenient. but if based on your budget, i am afraid you can get only an old apartment in TST because it is quite expensive to get a new apartment in there.

Sheung Wan, based on your budget, you can still some relatively new apartment but don't expect the size would be too big.

Here's a rational approach, making an 'investment' as distinct from a 'purchase':  

1. Figure out a small market niche that you're comfortable with.
  this is something you know, and can afford. A good example may be places appealing to expats: if you are an expat you probably have an edge there competing with locals, whereas you'll be easy meat if you try to enter a 'local' market.  I know someone who specialises in top-floor penthouses on HK Island ... a good example of an ultra-small niche ... she makes a killing because she knows it well.  

2. Forget all other opportunities, focus on your niche.  
  this requires self-discipline.  But you will kill yourself if you try to get to know the entire market, or respond to opportunities that you don't fully understand.  Property is not one market, and it doesn't all move together.  You can find niches nestling side-by-side, doing their own thing largely independent of the rest of the property market.  You have to be king of the hill in the target market you want to work in.  

3. Do the homework: go visit a lot of places.  
  sorry, there is no short-cut.  You have to know the market yourself.  Ultimately you're playing with your own money, and if you rely on other people to advise you or make recommendations, you will end up transferring all the economic benefit of the deal into their pocket.  If you're serious about making money in property you have to really love looking at places and then deciding not to buy.  

4. Make some lowball offers, and let them go.
  only way to know a good deal is to know exactly where that point is that the seller will walk away.  And the only way to know exactly where the market is today is to be outbid - by the smallest margin - and allow someone else to buy a good deal you would have truly wanted.  

5. The rest is easy: when you see a good deal, you will know it's a good deal because you've seen the other deals, and you can go for the jugular.  
  and, even better, you will be able to act as if it's a bad deal (even while you sign the contract), knowing all along what your next best fallback deal is.  Only way to get a good deal is to be able to walk away.  

6. While doing all of that, build relationships with banks, find a good solicitor who understands the pitfalls of your niche (especially important in NT), and keep your cash ready.  
  the best deals come on the market unexpectedly and then move fast, so you have to be ready.  It's always the fast mover that gets the best deals.  

Or, if all that seems like hard work, try the intuitive approach:

Read what's written in the newspapers, listen to the news, and take the advice of a nice friendly estate-agent.  But if you like that approach you might just as well go to Macau instead, you'll probably have more fun and at least have an outside chance of making some money back.  

Agree on all your points save for the "nice friendly estate agent"

Didnt know they existed, esp in HK, where they usually friendly with the heavy investor/speculator as they generate a lot of commission for them from fast turnarounds.

Here's a few paragraphs from a newsletter I receive on the latest steps to keep the real estate market from overheating.


-But keep in mind that about $30 billion got sucked out of the Chinese banking system yesterday. Granted, that doesn't seem like so much money these days. But it's not a small amount, either. The People's Bank of China lifted reserve requirements by half a percentage point at six Chinese banks yesterday.

--The banks in question are the Industrial & Commercial Bank of China Ltd., China Construction Bank Corp., Bank of China Ltd., Agricultural Bank of China Ltd., China Merchants Bank Co. and China Minsheng Banking Corp. Goldman Sachs followed that report with its own analysis that the increase in reserve ratios would remove about $30 billion from the banking system.

--For a banking system that pumped nearly US$1.4 trillion in new loans into the economy last year, $30 billion really is chicken feed. The People's Bank of China reports that new loans this year currently tally around 5.7 trillion Yuan - which is a lot less than last year's figure of 9.6 trillion. But there are still three months to go....

--Bottom line? Raising reserve requirements is one way to try and contain China's property bubble.


And the situation in the U.S.


--To be fair, the Chinese have nothing on America when it comes to bubbles. We probably failed to clearly make our point about the American housing market in yesterday's letter. We'll be clear today: the American housing market is headed for total destruction.

--The issue with the robo-signing scandal is that clear title could disappear in the American mortgage market. Part of the outrage is that U.S. banks have been foreclosing on mortgages which they don't even own. Part of the reality is that the convoluted process of securitisation means banks may not be able to prove at all they actually do own the mortgages.

--Already large unions in the U.S are encouraging borrowers to challenge banks to prove they won your mortgage. They've set up a website asking the question, "Where's your note?"

--You can see where this is headed. No one in America wants to own a failure. The banks want to foreclose on homes and sell them and avoid taking losses. Borrowers (some of them, and some of them rightly) want to avoid paying a debt for an asset that's worth less. No one wants to be responsible anymore because the most lucrative and least painful route is to abandon responsibility and your word.

Actually there is some help from China in the form of securities purchases of US government debt.  

I feel that most of the buildings in Hong Kong are overvalued and it's becoming clear buildings in China are built with shoddy workmanship, bad designs and worse material, and in many cases are over fifty years old.  Factoring pollution damages and outside forces.  Since the Hong Kong banks are not keeping a fractional reserve over at least 7 percent.  If two or more banks failing on Hong Kong similiar to how US banking system is now up to one hundred bank failures.

the Government has policy address today. a new measure is the removal of real estate from the asset class of the Investment Immigration Scheme, "The Government has reviewed the Capital Investment Entrant Scheme, and noted an upward trend in real estate investment, which accounted for 42% of the total investment under the scheme for the first nine months of this year.  Despite the fact that real estate investments under the scheme in recent years have only represented about 1% of the total market turnover, the Government, in view of public concern, has decided to temporarily remove real estate from the investment asset classes under the scheme with effect from 14 October.  The Security Bureau will announce the implementation details and other changes to the scheme later."

I personally think the low interest rates will make it hard for the banks to earn additional income, which would cause strong possibility of banking failure.  In the United States, alot banks did not have skilled white collar workers with law degrees
actually check the backgrounds of the contracts that failed in the mortgage industry resulting in large numbers of homeowners losing their homes to an automated foreclosure system that didn't read the fine print enough
to show that the homeowner actually had either time, or other means to pay the system.  Hong Kong probably has the same kind of automation when it comes to foreclosures and if a severe economic disruption occurs it would means a huge
supply of shoddy housing would flood the market.  Especially if the banks auto enroll the housing directly for quick sale.

You're not only a chronic spammer, you're a certified wacko

I'd have to agree with bro JckJr...what the hell are you talking about??

Hong Kong and US systems are completely different!

The US system crashed because invariably the houses weren't worth the wooden planks that hold it together. The houses were completely overvalued and when the first foreclosures started, everyone panicked as they all had negative equity and it snowballed from there. These houses arent in New York or LA, theyre in places like Orlando and the southern states etc.

Hong Kong is a much smaller market with a lot less land, hence all the reclaimation and plots going for ridiculous amounts in NT. As I understand, HK has one of the lowest foreclosure rates, and definitely lower than the US!!

You don't need a law degree to read a mortgage!! Its a cultural thing, Westerners in general, spend beyond their means and live on credit, whereas Chinese people have, at least more so in the older generation, the concept of saving and trying to stay cash heavy.

Obviously, just IMO.

oh come on, banks in HK are much better on risk management than banks in the US. Look at what happened in HK few years ago during recession and big property prices crash, the banking system in HK were still very good and in good shape.

The problem in the US is the government did not enforce the regulations they have and now they just create more new regulations... this is not going to fix the problems and people working in finance are definitely smart enough to know where is the loopholes after regulations come out.

[ Last edited by  haroldla at 15-10-2010 01:57 ]

American may like to believe the US collapsed because of the subprime loans, however that is just one as contributor to the crash, your forgetting the us of Derivatives which many banks tumbling.

Hong Kong's situation is very different, and no question the market will correct itself in time, but I don;t think it will be as drastic as a recession, of course that's all hypothetical as the US may play another factor in the recovery and China's economy.

Regulation? It was more of a total lack of regulation? It was free for all and no one cared as all the bad debt was 'insured'. Greenspan fell asleep during his watch and now the US banks are going after China and want to raid their reserves. All these Feds are now ex Goldman and are going for gold. It's the easy way out and if China buckles and gives in to demands to open its current account and allow the RMB to appreciate, the contagion will spread to China. Can you imagine all these credit swaps on the RMB? It could devastate the economy and wipe out 30 years of hard earned savings and work. Best way for China to protect itself is to just keep its current account and currency closed. This has served them well in the past and protected them from the 1997 Asian Financial Crisis and the 2008 Financial Tsunami.

i totally agree of what you said. and the way and speed of falling USD has already made the global economy going more volatile and boom and bust scenario. the US bond market is definitely another bubble now, so after it burst one day, i don't know what would be the economy looks like.

i think we should fasten our seat belt and think about more what we should do for our money.