Be alarmed and alert.... but don't panic

Singapore clearly was a bubble. And it was very obvious using traditional valuation metrics.

HK is not a bubble. Prices are down a bit but I see a more upside in HK using traditional metrics. In particular look how restricted HK borrowers are - can get almost no leverage and banks will only be allowed to ease off once interest rates start to rise ...

 

I agree. I've bought a very small place I hk last 2 months. Looking to average in.

Re leverage, Singapore has the same rules.

 

How is HK not a bubble? Care to share what traditional metrics you are using?
Has the real estate bubble burst? Hong Kong flat prices return to early 2014 levels, experts say the drop will continue

Hong Kong Land Price Plunges Nearly 70% in Government Tender

Hong Kong residential sales plunge 70 per cent

From the news I am reading coming out of HK, it sounds like the crash has already started. Decade plus ago they had a big property crash with prices plunging more than 70% so a repeat is pretty likely.

Leverage wise in China and HK there's an abundance of unregulated financing, that's why its called shadow banking, could get 100% loan pretty easy if you have some assets to back or agree to their high interest rates.

 

Hmmmm.. I think it's unlikely to have a 70% crash. The crash decade ago was due to multiple factors - government policy to increase land supply, SARS, etc. This type of crash only happened twice in HK in last 50 years. One was in 1967 and the other was in 2003. Good time to buy when it crashes, property prices went up 4 to 5 times since 2003.

 

I could cite alarmist type articles for every year since 2003 and each year it's gone up.

The main possible driver of a downturn in hk is of the fed raises rates. The market panicked a bit last half year fearing aggressive rate increases. We are now likely more realistically at 1 further rise these year or maybe none. In other words negative news overpriced in. On top of that you have China stimulus which will flow into hk and a global stabilisation of stock declines. Super limited supply in hk and yet strong demand. The slightest ease off of the very drastic "cooling measure" will likely lead to a pop. So a great time to buy (and with no capita gains tax).

 

Time to buy up in bulk in HK.

In 6 months, Shenzhen, Shanghai have already far outperformed what Sydney/Melb has done in 24 months. The money will soon overflow to HK and Guangzhou. I'm back again in April to hopefully buy another.