Hong Kong Monopoly - Where does Park Island rank?
Check out this HK Monopoly board created by Justin Cheuk.
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| Hong Kong Monopoly |
Way down the bottom is Cheung Chau. About half way around is Discovery Bay. Around a third of the way around is Ma Wan, ranking above Happy Valley, At the top end you have Repulse Bay and The Peak,
Do you think this is an accurate reflection of HK prices? I am surprised to see Ma Wan so much higher than Discovery Bay. It certainly wasn't like that 6 years ago, when Ma Wan was not as well known...
Obviously, most of your predictions for 2016 have been wrong, as the market has dropped around 15-20% on Park Island. Any ideas about how long the downturn will last
ReplyDeleteHi Bruce. I'll try to send up a more detailed update a little later. Been too busy to blog.
ReplyDeleteBut a few quick points to consider...
If HK property prices have, for example, fallen 15% over the last 18 months in $HKD, but the HKD has risen for example, 25% over the last 18 months compared to a basket of global currencies, have you actually lost money or made money?
Or put another way, lets say you could choose to depreciate the HKD by 40% but have property, in HKD, gain by 20%, or, you could choose to have the HKD rise by 40% but HK property prices fall by 20%, what would you choose? (For the record, I would choose the latter).
Now the above scenario might be especially real for anyone considering buying assets in the UK right now (be it stock or property or currency). Think about how much you have "gained", in UK currency terms, with your HK property that "fell in value" over the last 18 months.
From a political perspective, and from a sentiment perspective in HK, things can't get too much worse right now (well, unless we have a SARS or similar-type crisis). It is not a time to sell now, for sure. Remember there is a huge amount of repressed value in HK property that can (and eventually will) be unleashed if and when the HK Government eases of its so called "spicy measures" that were put into place to bring prices down a little. Relaxed maximum lending rates from banks, reduced stamp duty - all will provide very nice support for prices if when the "spices" in the "spicy measures" are reduced. As to when that will happen, I think its most likely to happen, lock-step as and when US interest rates finally start to increase, (or if/and when HK unemployment rate increases - it would basically be the HK equivalent of what other countries do when the reserve bank eases. Suddenly you would see prices increasing, people spending more based on increased equity value, thousands of people working again as agents, manual workers doing apartment renovations, etc).
The interesting thing about what will happen when the US increases rates, is that US interest rate increases will push up the value of the USD (and also the HKD which is pegged to the USD). So what may well happen is that as the spicy measures are reduced, you will get modest gains in HK property in nominal values (ie in HKD - I'm guessing the Govt wants to see no more than 5-8% pa once this process starts) but in non-HKD currency terms, due to the appreciating HKD over a basket of global currencies, your gains might well be double that.
Hope that all makes sense. Sorry for the slightly cryptic reply! Hope it provides some perspective for thought.
Hang in there. I'll post a little more regularly again soon.
Thanks for the reply. Unfortunately for me, the currency I will be transferring into is the NZD, which has increased against the USD. However, they are looking to reduce their currency through lowering interest rates etc. But I agree that if the HK Govt wanted to reinvigorate the housing market, they could do it with one stroke of a pen...Reduce stamp duty
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