But inflation is strongest nearest the source. Seems on the surface that Hong Kong is still going strong:
But Chinas credit impulse is now negative and credit creation has to be better managed as part of the Chinese economic restructuring/ rebalancing.
So I dont see the outlook over say a 2-5 year view for Hong Kong resi being very good if things go well, and if there is some sort of crisis it will get destroyed.
This is what happened post 1997 with the Asian crisis and unification:
Basically property prices more or less went back to pre-1993 prices by 2003 (I dont have pre-93 prices but the Jan 93 index was 84 and the market bottomed out in the 60's). ie everyone who bought after 1993 was significantly underwater. If you bought near the peak you had a drawdown from 1997 through to the bottom in 2003 and it took until 2011 and a new Chinese credit bubble to get back to flat. The drawdown from the top in 1997 was 66%, even it you ignore the extremes, many people will have had 40-50% drawdowns.
10-20 years is a very long time in someones life cycle to wear negative equity. You have to wonder if they will just default instead which raises questions about the solvency of the Hong Kong banking system.
I have no idea when Hong Kong residential will blow up, but bubbles always pop and probably all it takes is one administrative decision to do it from here. China's credit bubble is unprecedented. The price action since 2015 also looks volatile and turning points are often associated with volatility, ie bull traps.
I thought I would look at rents, as in the end they underpin capital values. Rents also have fallen in downturns (post-97 and 2008), but capital values have massively outpaced rents in this cycle, further evidence of capital flight/ hoarding.
The real estate sector in China is a key part of China’s economy. Due to the gradual market opening and government stimulations of the housing sector over the last decades, investments in real estate properties have experienced a long-lasting boom. JohnReplyDelete
These factors all lead to one thing - a higher need for real estate agents to help the buying and selling of all of these properties. casas de férias na international drive orlandoReplyDelete
Pretty good post. I just stumbled upon your blog and wanted to say that I have really enjoyed reading your blog posts. Any way I’ll be subscribing to your feed and I hope you post again soon. real estate photographers in austinReplyDelete
I wanted to leave a little comment to support you and wish you a good continuation. Wishing you the best of luck for all your blogging efforts. homes for sale in marble falls txReplyDelete
I'm happy to see the considerable subtle element here!. home loanReplyDelete