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Hong Kong property outlook - and Data Base


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#461 Euro Chocozone Buyer

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Posted 04 May 2017 - 01:15 PM

The Chinese Yuan may come under pressure...

With all the banking problems and bad loans, Kyle Bass expects the Yuan to be the "arbiter"

or what Axel Merk calls "the valve"

 

If a big devaluation in the Yuan is coming, it will impact HK and HK Property IMO

so this is something to watch,

 

https://www.bloomber...bal-risks-video

 

For those of you who haven't seen the growth in private debt for China (and HK), it is alarming. Here is the chart.

 

https://www.ceicdata.../household-debt

 

Household debt rose 1000pct in 10 years. It is a bubble on steriods, and it will not end well.

 

China -- and probably HK -- will never recover from this disaster IMO.



#462 Euro Chocozone Buyer

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Posted 06 May 2017 - 02:47 PM

https://dailyreckoni...scheme-history/

 

Another warning from James Richards



#463 DrBubb

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Posted 07 May 2017 - 09:44 AM

The HK Property "peak" - delayed again?

 

(From AXP):

D.C. :

Seems like prices r blowing through the roof bro. Tht peak making higher highs... Probably better idea to just buy if u need to rent cuz no point speculating where the trough is. Just dun overextend budget n save capital so u hv ammo when there will be a correction
S.D. :
....there were some very well researched and sound views on property prices the last time I was on this site. I wonder if these views still hold? I am currently renting in Mid-Levels (and have been doing so for quite a number of years now) while waiting for the right moment (not that there really is a "right" moment) to buy. I apologise for reaching out this way and would really appreciate any thoughts anyone might have.
 

=========

I do realize that the Centaline property index show price making record highs

ccli_chart_zps0uaolj7b.png

 

For me:
The 18 years cycle operates in most countries, and is normally : about 14 years Up, and 3-5 years down.

"Expected" peak depends on where you start:
1997 Peak+ 18 = 2015
2001 Low + 14 = 2015 (from the notional Low we "should have had" without SARS
2003 Low + 14 = 2017 (from the Actual low, brought by SARS)

I used to say: Expected peak is "2016 +/- One Year"

Looks like 2017 is now the preferred case, helped on by continuing big buying from mainlanders

 

Even so, when I look at the actual prices of the HK Property share Index ... update

 

HK-propertyShs_zpsq2sms7dz.gif

 

... I am left with the belief that an important Top is being formed


The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#464 DrBubb

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Posted 07 May 2017 - 09:47 AM

China's Wealth Mgmt Products wobbling

 

https://dailyreckoni...scheme-history/

 

Another warning from James Richards

 

Now China is about to set the world record with a $9 trillion Ponzi. Here’s how it works…

The Chinese have a middle-class of several hundred million people with a high propensity to save. Most Chinese don’t get to invest overseas, so they are limited to real estate, gold and local investment products, mostly sold through banks.

When customers go into a bank, they are offered a standard bank deposit paying about 2%, or a “wealth management product,” (WMP) that pays about 8%.

WMPs are something like the collateralized debt obligations (CDOs) that brought down Lehman Brothers.

Many customers naturally take the 8% return and invest in bank-managed WMPs. Customers believe the WMPs are guaranteed by the bank or the government. They’re not — WMPs are just unsecured investments.

WMP’s have been described by the former Chairman of the Bank of China as the greatest Ponzi scheme in history.

It gets worse…

The banks use sales of WMPs to invest in the riskiest development projects and state-owned enterprises (SOEs) on the edge of bankruptcy.

These institutions behind these projects, financed by the original WMPs, cannot repay them. So most of the WMPs will never be repaid.

Banks rely on sales of new WMPs to redeem the old ones at maturity. Today, when a customer wants his money back, the bank sells a new WMP, and uses that money to cash out the redeeming customer. The new investor steps into the shoes of the old with the same bad underlying investment.

What happens when everyone wants his money back at once, or new customers just stop investing?

That’s what happened to Madoff, and that’s what will happen in China. Even China’s $3 trillion in hard currency reserves won’t be enough to cover a $9 trillion panic.

==

> more - see link, above


The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#465 DrBubb

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Posted 08 May 2017 - 05:35 AM

EXCELLENT Report - from MDS and UBS !

 

Summary

=======

UBS's View, 25 April 2017
.

: HK :  We assume three Fed rate hikes in each of 2017 and 2018, in line with our  US  economists'  revised  view.  We  have  assumed  the  Fed  hikes  are  passed  through  into  higher  HK  mortgage  rates... We  estimate  absorbing  two  further  hikes ... Our  multivariate  regression  model  suggests  HK residential price growth of +1% in 2017 and -3.4% in 2018. We note our country team is more conservative, assuming Hong Kong residential prices decline 5-7% in 2017..

.

: Singapore residential prices have fallen 11.7% from their Q3'13 peak.
We expect the downtrend in Singapore residential prices to continue, given rising interest   rates,   elevated   vacancy   rates   and   slower   economic   growth.   Our  multivariate regression model ... is pointing towards a 4.5% fall in Singapore residential prices in 2017, fairly close to our country team's estimate of a 6% drop.

.

: Manila, PH :

Launches in Metro Manila declined 12% in 2016 but take-up improved (+25%) according to Colliers, resulting in a decline in inventory levels from a peak of  2.6  years  to  1.7  years.  We  expect  the  developers  to  respond  with  a  pick-up  in launches and capex this year.  Residential supply is forecast by Colliers to grow by 54%  over  the  next  five  years,  putting  downward  pressure  on  rental  rates.  A  decline  in  rental  yields from  6%  to  5%  may  put  into  question  the  ability of residential  prices  to  hold  in  2018...

.

: Bangkok, TH :

We  expect  2017  to  be  a  better  year  than  last  for  Thai  property  given  more favourable demand-supply dynamics in the condo segment. House prices are expected to rise moderately on the back of land price appreciation and an increase in the proportion of new condo launches in the high-end segment;  ... a short-term  strategy  employed  by  a  number of big developers to navigate through rising rejection rates in the low-end segment.  In  2017,  we  expect  moderately  positive  house  prices  growth  for  the  primary  market,  given  rising  land  prices,  and  an  increase  in  the  proportion  of  new  condo  launches  in  the  high-end  segment:  85%  of  the  buyers are Thais and the remaining 15% are foreigners.  For the secondary market, we expect prices to be flat. In Bangkok there can be a ~30%   price   difference   between   primary   and   secondary   pricing,   with local consumers strongly favouring primary over secondary property for purchase.


The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#466 Euro Chocozone Buyer

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Posted 08 May 2017 - 05:19 PM

Knigt Frank is more bullish.

Forecasts 5 pct price growth in 2017 despite all the headwinds.

 

http://www.knightfra...ts-pull-factors



#467 DrBubb

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Posted 09 May 2017 - 02:36 AM

It is good to see some diversity of views.

If everyone has the same view, they are probably ALL wrong. haha


The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#468 Euro Chocozone Buyer

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Posted 16 May 2017 - 05:36 PM

And JLL is even more bullish, -- they have "upgraded" their forecasts for HK Residential Prices,

now expected to rise 10 to 15pct this year.

 

It seems to me that the property agencies, everywhere, -- JLL / Knight Santos / Colliers -- are way

more bullish than the - perhaps more independent - research analysts from the banks and brokerage houses.

Maybe there's a conflict of interest?????????????

 



#469 leviathan

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Posted 03 June 2017 - 08:37 PM

http://parkislandhon...-still.html?m=1

This article has a similar target to me for a top in Centaline circa end 2018. I expect to get there a bit later than that possibly 2020 or 2021.

#470 DrBubb

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Posted 03 June 2017 - 09:54 PM

Same article, different link

 

Hot hot hot, and why property is still cheap in Hong Kong

 
Its pretty damn hot in HK right now, And I mean both the weather AND the property market.
 
People are making good use of the pools on Park Island and the ocean and beachs at Ma Wan, and agents are doing well for themselves selling to property to eager buyers who seem to be of the view that demand for property in HK is going to rise in the coming months and years ahead.
 
Property prices are at record historical prices, but this is of course also the case in many other major cities in the world, whether Sydney, London, Berlin, New York, Shanghai. 
 
Many experienced property analysts who have seen prior cycles believe that the fundamental conditions need to support a new boom over the next few years are firmly in place. Looking at the Centadata property graph below, many are expecting a new peak to get up to 200 on their price graph by the end of 2018 as the market starts to accelerate.
 

HK%2Bproperty%2Bprice%2Bgraph%2B2017.JPG

> more: http://parkislandhon...y-is-still.html

 

200?  I doubt that somehow

Neverrtheless, The Prop Shares are pushing back towards Highs

> http://charts.aastoc...=1&logoStyle=1

 

Most Unaffordable Cities
Honk Kong : 18X incomes
Sydney-- : 12.2X
Vancouver: 11.8X
London-- : 8.5X
New York : 5.9X

 

Why is Hong Kong housing so expensive? | CNBC Explains


The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#471 DrBubb

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Posted 03 June 2017 - 10:13 PM

Micro flats not a full solution to HK's housing crisis

 

Micro flats tackle Hong Kong's high housing prices

 

/ 2 /

Keeping good humor about a very tight situation

We girls in the Ridiculously tiny flat in Hong Kong


The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#472 Traineeinvestor

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Posted 09 June 2017 - 08:25 AM

Deutsche Bank continues with its bearish predictions on the HK property market

- basic expectation is that property prices will halve over the next ten years

http://www.scmp.com/...s-says#comments

 

They may well be right (or not), but as is mentioned in some of the comments, Deutsche Bank's track record on this subject is poor.

 

And mine isn't much better - I've been saying that HK property is too expensive to represent good value for a few years now, and it's kept going up. Fortunately, I didn't sell but as things stand right now, the double stamp duty is a huge impediment to cashing out.



#473 DrBubb

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Posted 11 June 2017 - 01:41 AM

VALUES WILL HALVE?

 

Deutsche Bank continues with its bearish predictions on the HK property market - basic expectation is that property prices will halve over the next ten years http://www.scmp.com/...s-says#comments

 

They may well be right (or not), but as is mentioned in some of the comments, Deutsche Bank's track record on this subject is poor.

 

That is truly dramatic... a halving of values.

I suppose it could happen if rents are stagnant and HK mortgage interest rates double

 

(in edit):

DB are looking at something different from rising rates - shorter maturities

 

Home prices in Hong Kong could fall by nearly half over the next 10 years as a rapidly ageing population coupled with rising supply of new flats will dent demand, according to a report by Deutsche Bank.

“We expect vacancy to surge to 9 per cent, from 4 per cent now, and average selling price to slide 48 per cent by 2026 from current level,” wrote property analyst Jason Ching.

As the population ages, fewer households will be able to stretch their mortgages to the maximum tenure of 30 years, the report said.

 

I don't totally but the shorter maturities argument -

Paying more principle inside a mortgage payment is not the same thing as paying more interest.

The interest is lost and gone forever.  The principle payments you will get back if/when you sell for more than the mortgage balance.

But there does seem to be a real shift in the supply/ demand balance coming:

 

Deutsche Bank said overall housing take-up has declined markedly in the past decade,

mirroring the deceleration in population growth.

“We estimate total housing demand of 338,314 in 2017 to 2026. This compares with new supply of 429,296 over the same period. We expect a private housing supply surplus of 93,781 in 2017-26,” it said.


The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix




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