Property, time to Sell?
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PS : don't forget to factor in the housing allowance..depending on your package and company the fact is this is money you are investing which you would otherwise be spilling down the toilet on rent. Do your sums you may find you can afford property to go down eg 20% more over x months or years and you stlll break even AND have a home rather than be paying off someone else's asset with your rental allowance.
Look at the quality of life of those who are advising you and their values. Often the ones who didn't invest wisely will shout "you are crazy to buy when you are buying mate" then when prices go up they will say "sell ow coz the bubble will burst" then if things take a downturn they will clap their hands and justify the fact the have "lost nothing". If you think this is a good way to live ones life....bend their ear, or find those who come over make the best of their packages stick their necks out and regardless of economic potential trends at least are not scouring the headlines for bad news everyday and have lived a life as well as been an expat.
I think Buffet said...be greedy when everyone is fearful and be fearful when everyone else is greedy.
Look at the quality of life of those who are advising you and their values. Often the ones who didn't invest wisely will shout "you are crazy to buy when you are buying mate" then when prices go up they will say "sell ow coz the bubble will burst" then if things take a downturn they will clap their hands and justify the fact the have "lost nothing". If you think this is a good way to live ones life....bend their ear, or find those who come over make the best of their packages stick their necks out and regardless of economic potential trends at least are not scouring the headlines for bad news everyday and have lived a life as well as been an expat.
I think Buffet said...be greedy when everyone is fearful and be fearful when everyone else is greedy.
volarecantare
The problem is that the people in Hong Kong aren’t yet fearful, unlike people elsewhere. If the world wide turmoil continues like it did overnight then Hong Kong will be affected.
The problem is that the people in Hong Kong aren’t yet fearful, unlike people elsewhere. If the world wide turmoil continues like it did overnight then Hong Kong will be affected.
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My two cents worth; which was $1 about 90 years ago and be worthless in a few years time:
If you own a home, keep it ...... IF:
If you own a home, keep it ...... IF:
· You have factored in a significant increase in interest rates. If not re-evaluate how much debt you are carrying. IMHO around $5M in debt is a good balance of risk v reward, and very wise use of the CX housing allowance.
· You intend staying in Hong Kong for a while. If not, now might be a good time to get out. If you don’t need the equity in your home country ... keep the house and rent it!
· You are far enough up the seniority list to not be affected by a company downsize! If you are new to CX and you own, your risk side of the equation goes up. If you are new to CX; IMHO hold off any home purchase for a while.
What will happen to HK House prices? IMHO it depends on whether you are looking at the short, medium or long term?
· In the short term, prices will most likely come back a bit. Why? Well there is an element of fear out there as well as the fact people are probably carrying more debt than they should be which will slow things down a bit.
· In the medium to long term? Much harder to predict! If the USD continues to weaken (I disregard the recent USD strength) then HK property would start to look cheap to people buying using RMB or other foreign currencies. Of course, for expats this “price increase” would be nurtured by the loss in home country exchange rates. If the HK Govt decided to depeg , repeg or abandon the HKD, then prices could do anything! A rapid increase due to speculation or a rapid decline due to perceived over valuation! If I knew the answer to this I wouldn’t be flying buses for a living!
404:· No depression? Not yet! Recession? Most definitely and for quite a while already! Surely you do not believe the Government Statistics? Check out http://www.shadowstats.com/ for a more realistic picture. It should be obvious that it is not in the interest of any government to paint a bad picture of their economy. The CPI and unemployment numbers are the easiest to manipulate. Other figures like M3 have been abandoned by the US government! What is M3? M3 is a stat that shows how much money is being printed! Surely, that isn’t important to know! Riiiiiiiiiight!!!!!
For those who think the problems are over, consider this:· The sub-prime crisis was an estimated $5 Trillion problem and it has caused the current mess. Just wait for the derivative market to bomb! That is a $600 Trillion dollar market with potential loses of almost $60 Trillion dollars! What is happening now will seem like a holiday if/when that happens!
· The US Government’s $700 Billion dollar bail out is a perverse blank cheque to failed businesses and will result in significant inflation. NB: Inflation is the increase in the money supply not how much your burger costs! Deflation is a contraction in the money supply which is impossible in the current environment! The current bail out will not be the last, but each effort to protect the various failures will only make things worse!
Sincere best wishes to all!
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Just remember one thing , a lot of current cx pilots were not here during the 97 crash! I know of some guys that paid close to 5 mil for a flat in DB and even today they are only worth 3.5mil.
If you have a huge debt...I'm afraid you will be needing sleeping tablets to get some sleep. With interest rates at 2.35% and the USA about to dump nearly 1 Trillion dollars on the market (that is just what they printed last week for AIG) and another 700 Billion next week, inflation is going to be a big problem in the future and we all know where there is high inflation there will be higher rates!
Also it was only a few months ago that we 5% rates here...can you stomach 7% or 9%....
If you have a huge debt...I'm afraid you will be needing sleeping tablets to get some sleep. With interest rates at 2.35% and the USA about to dump nearly 1 Trillion dollars on the market (that is just what they printed last week for AIG) and another 700 Billion next week, inflation is going to be a big problem in the future and we all know where there is high inflation there will be higher rates!
Also it was only a few months ago that we 5% rates here...can you stomach 7% or 9%....
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...and everyone panic dumping will of course help the situation like it did back then. How much would those DB guys have saved had they dumped their DB appts in 97 went onto the rental scheme? At least their 3m appts are most likely their asset now. 10 years of loss of housing scheme =??? do the sums. 10 years of rental =0 + what you could have lost out in investments plus the benefit of living in some rental place paying off someone else's asset.
Again make personal decisions calmly and taking all your own circumstances and plans into consideration.
Sounds like some people are so invested in misery and doomsday and a fearful of ever been proved wrong!
Again make personal decisions calmly and taking all your own circumstances and plans into consideration.
Sounds like some people are so invested in misery and doomsday and a fearful of ever been proved wrong!
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Sounds like some people here have been watching the big boys and are trying some market manipulation of there own. Pprune is a start but I think you may need to own your own paper to really drive the market. Good luck
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Volarecantare, they actually did not do as well as you think. If they just took the money they were paying for the extra tax, management fee and rates and invested it into the stock market for the next ten years or any other property market around the world, they would have made more money than 3 mil honkey today (as long as you sold out a few months ago).
If you purchased a 400,000 place in the UK, Aus or the Us back in 97, you would have more than doubled your money and with the exchange rates your probably would have tripled your money.
Just remember the Hong Kong market is driven by sentiment, and unlike other places it is timing that counts more than time in the market. The people that make the big dosh move in and out a few times in a rising markets and usually you will see their involvement at the beginning of the boom
Now I'm not saying that you must not use your housing allowance, all I want to say is that if you are looking at your house and a investment , then you need to make good investment decisions , which means buying and selling at the right time, and not just buying because you have a housing allowance.
The other down side of the guys buying in 97 is that they were forced to live in the same place until CX paid it off, as they had massive negative equity and very low rent , interest rates were as high as 9% possibly even 11% if I recall correctly).
If you purchased a 400,000 place in the UK, Aus or the Us back in 97, you would have more than doubled your money and with the exchange rates your probably would have tripled your money.
Just remember the Hong Kong market is driven by sentiment, and unlike other places it is timing that counts more than time in the market. The people that make the big dosh move in and out a few times in a rising markets and usually you will see their involvement at the beginning of the boom
Now I'm not saying that you must not use your housing allowance, all I want to say is that if you are looking at your house and a investment , then you need to make good investment decisions , which means buying and selling at the right time, and not just buying because you have a housing allowance.
The other down side of the guys buying in 97 is that they were forced to live in the same place until CX paid it off, as they had massive negative equity and very low rent , interest rates were as high as 9% possibly even 11% if I recall correctly).
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Frogman points well made and I think a better tone than some of what is often used here. At least some real discussion can take place and help out some of the new guys with small families etc to make some informed personal decisions. My issue was with the scare mongering and hyperbole that is often trashed out here often in response to some genuine expressed concerns and vulnerable people. We have no control over the press and manipulations of the international press, look back at Y2k coverage, SARS, 911 etc. We are a group of professionals remember who are trained to deal with emergencies. If this is a global emergency then we should employ the same level headed tactics and ensure we are well informed and inform those with facts rather than panic and scare tactics.
Not sure if selling up and investing saved cash from management fees etc and investing in the stockmarkets is the solution just now though...then again, maybe this is exactly the time to buy...the fact is who knows? At my age the only thing I can say gives the best return on investment and is within our control is our health and relationships. Loose them and it doesn't matter what seat one is in or the value of their house or stocks....and fear and STRESS by the way does the biggest damage to both.
Not sure if selling up and investing saved cash from management fees etc and investing in the stockmarkets is the solution just now though...then again, maybe this is exactly the time to buy...the fact is who knows? At my age the only thing I can say gives the best return on investment and is within our control is our health and relationships. Loose them and it doesn't matter what seat one is in or the value of their house or stocks....and fear and STRESS by the way does the biggest damage to both.
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In the end, no one has a crystal ball. I still remember people berating others during the SARS crisis for buying property then, saying that our jobs were on the line, why are people even considering spending such astronomical sums in a potentially dead market?
No doubt that this financial crisis is going to hit our pockets in a big way. However, one must not lose sight of the big picture, especially if you're planning to stay in HK for the long term. I know one who bought a flat back in 97, stayed in negative asset until late last year. But he's doing just as well as everyone, because he kept on going instead of sulking about how much he lost on his original flat. I think he owns a few flats in HK now, among other places.
Frogman and Volarecantare has brought up a few good points for either side of the argument, but I don't think anyone has a specific answer to anything, just opinions. In the end, the most important thing is to take your time and assess your situation. It's good to be cautious, but then, the risk of having nothing at retirement by being cautious is almost as high as being risque.
No doubt that this financial crisis is going to hit our pockets in a big way. However, one must not lose sight of the big picture, especially if you're planning to stay in HK for the long term. I know one who bought a flat back in 97, stayed in negative asset until late last year. But he's doing just as well as everyone, because he kept on going instead of sulking about how much he lost on his original flat. I think he owns a few flats in HK now, among other places.
Frogman and Volarecantare has brought up a few good points for either side of the argument, but I don't think anyone has a specific answer to anything, just opinions. In the end, the most important thing is to take your time and assess your situation. It's good to be cautious, but then, the risk of having nothing at retirement by being cautious is almost as high as being risque.
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Volarecantare what you say works in an ideal world, but as we all know we do not live in one and what you will find is that emotions rule the market. Greed and fear go hand in hand. When you have no fear , greed will eventually take over and you will accept almost any level of risk. When the bubble bursts, fear takes over and everyone tries to sell at the same time.
Buffet says " When there is fear in the market, Buy. When there is greed, Sell!
Thats why he sold Pertochina at $21 and bought Goldman when he did....timing!!!
Buffet says " When there is fear in the market, Buy. When there is greed, Sell!
Thats why he sold Pertochina at $21 and bought Goldman when he did....timing!!!
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Why is this thread pining Hong Kong Real Estate:Property for sale and rentals Hong Kong and international with our comments? Check the Trackbacks when you reply.. 
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Look if you buy a place today, you can pay off with you housing in 10yrs.. then whats the big deal? In 10 yrs.. you will get most of the money the COMPANY put in.. back in your pocket.
If you need 20-30 to pay it off.. you're over buying.
Anyone can put up with HKG for ten years.. some may even like it.
Buy a house, have them pay for it, and then in 10 yrs decide if you want to play the market..until then, well you have to live somewhere don't you..
If you need 20-30 to pay it off.. you're over buying.
Anyone can put up with HKG for ten years.. some may even like it.
Buy a house, have them pay for it, and then in 10 yrs decide if you want to play the market..until then, well you have to live somewhere don't you..
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You are right Frogman, emotions fear and reactions do tend to rule the markets, I just don't agree that it should rule our lives, we always have a choice how we respond to situations and a response is always better than a reaction. Collective conscience of that is akin to peer pressure. Are you suggestion that choosing something other than peer pressure is purely idealistic. Where do you thing change begins?
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one person is not going to move the market. It is up to you to use the irrational fear in your advantage.
The thing of sitting on a property for 10-15 years is a good idea if you can buy something big enough to accommodate a growing family (try panning more than 6 months ahead with CX!!!). Generally now if you are buying something big enough it also means that you most probably not going to pay it off in that period.
I personally think that CX lets us move in and out of the rental/owner market...use it to your advantage. You have 15 years of owner income from CX but most of us have 20-25 year careers with CX.
Timing is everything!
The thing of sitting on a property for 10-15 years is a good idea if you can buy something big enough to accommodate a growing family (try panning more than 6 months ahead with CX!!!). Generally now if you are buying something big enough it also means that you most probably not going to pay it off in that period.
I personally think that CX lets us move in and out of the rental/owner market...use it to your advantage. You have 15 years of owner income from CX but most of us have 20-25 year careers with CX.
Timing is everything!
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I have always used the fear to my advantage by looking at how the fearful are reacting and responding differently. In doing so each time I have been laughed at or mocked by the fearful during their panic stages and then a while later being told I was "lucky". The scenery may change but principles stay the same. I just refuse to allow the lower common denominator of negativity and fear decide my life. At the end of the day no one knows how things will unfold but terror living is no way to live.
...and by the way change always starts with just one person. It could be you frogman.
"If you think you are too small to be effective, you have never been in bed with a mosquito." - Betty Reese
Oh and Frogman by the way....Buffet has just invested 5b into Goldman Sachs
Stocks fluctuate after Buffett-Goldman deal
By TIM PARADIS – 2 days ago
NEW YORK (AP) — Financial markets were tense Wednesday, with stocks fluctuating following investor Warren Buffett's decision to invest $5 billion in Goldman Sachs Group Inc.
...and by the way change always starts with just one person. It could be you frogman.
"If you think you are too small to be effective, you have never been in bed with a mosquito." - Betty ReeseOh and Frogman by the way....Buffet has just invested 5b into Goldman Sachs
Stocks fluctuate after Buffett-Goldman deal
By TIM PARADIS – 2 days ago
NEW YORK (AP) — Financial markets were tense Wednesday, with stocks fluctuating following investor Warren Buffett's decision to invest $5 billion in Goldman Sachs Group Inc.
Last edited by volarecantare; 27th Sep 2008 at 11:03.
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Thats why he sold Pertochina at $21 and bought Goldman when he did....timing!!!
Buffet Sells More PetroChina Shares - Companies * US * News * Story - CNBC.com
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Frogman1484 said:
While I agree with much of what you have said, it would be more helpful if commentaries such as yours contained factual information rather than pure hype.
The facts are that Buffet sold the Petro China stake over an 11 week period (12/07/07 to 27/09/07) at prices between HKD11.26 and HKD13.89, not even close to the HKD21.00 you state. The share price went to its all time high (HKD20.25)after the announcement that he had disposed of his entire holding. Market commentators at the time used the premise that there was now no Berkshire/Buffet overhang, for PetroChina's sudden price spike.
When asked a month or so later when the price was close to its all-time high of HKD20.25 as to why he had sold, Buffet stated "it was all about the price and nothing to do with PetroChina's business dealings in Sudan"
Buffet is a spectacularly successful investor, but he's still not a God (last I checked at least). Time has again proven him right with his PetroChina disposal, given the current price of HKD8.48 is something like 37% lower than his highest disposal price.
However, he clearly could not perceive the price going to HKD20.25, otherwise he would not have sold everything when he did. Even geniuses like Buffet can't accurately predict the highs and lows. That is simply impossible.
It's just another demonstration of the manic characteristics of Mr. Market and our susceptability to his manic depressive state, as we are seeing now.
My own opinion is that the market is beginning to look very attractive from a valuation perspective and I will be steadily adding to my holdings over time, but with a long investment horizon. That doesn't mean they won't fall more over time, they possibly will. However, I can't be sure of that.
Based on current sentiment, I also fully expect to see more downside with extreme volatility a feature for some time to come. However, it would not be the first time that sentiment has been radically changed overnight by some unexpected positive development. The truth is, none of us will ever know and we can only invest on the long term fundamentals presented to us at the point in time you make your investment.
As for property,well it's definitely got some falling to do. HSBC have reduced valuations on many of the properties in my area by 15% this past 3 weeks alone. This is backed up by the Centadata info. Prices are only just starting to fall.
In the financial crises we face today, ultimately ALL asset classes will fall and cash will be whittled away by inflation if left in the bank. I wouldn't be running out and buying property any time soon, unless you are prepared to see it fall at least another 15% to 20% in value. One only has to look at the way property followed the stock market down some 6 to 12 months later in all previous financial crises in Hong Kong, to see where it is headed now.
Even gold has not retraced its rise to over USD1,000 and that's been in unbeliavably volatile and panicked times.
It will all get better one day, it's just going to take some time.
Buffet says " When there is fear in the market, Buy. When there is greed, Sell!
Thats why he sold Pertochina at $21 and bought Goldman when he did....timing!!!
Thats why he sold Pertochina at $21 and bought Goldman when he did....timing!!!
The facts are that Buffet sold the Petro China stake over an 11 week period (12/07/07 to 27/09/07) at prices between HKD11.26 and HKD13.89, not even close to the HKD21.00 you state. The share price went to its all time high (HKD20.25)after the announcement that he had disposed of his entire holding. Market commentators at the time used the premise that there was now no Berkshire/Buffet overhang, for PetroChina's sudden price spike.
When asked a month or so later when the price was close to its all-time high of HKD20.25 as to why he had sold, Buffet stated "it was all about the price and nothing to do with PetroChina's business dealings in Sudan"
Buffet is a spectacularly successful investor, but he's still not a God (last I checked at least). Time has again proven him right with his PetroChina disposal, given the current price of HKD8.48 is something like 37% lower than his highest disposal price.
However, he clearly could not perceive the price going to HKD20.25, otherwise he would not have sold everything when he did. Even geniuses like Buffet can't accurately predict the highs and lows. That is simply impossible.
It's just another demonstration of the manic characteristics of Mr. Market and our susceptability to his manic depressive state, as we are seeing now.
My own opinion is that the market is beginning to look very attractive from a valuation perspective and I will be steadily adding to my holdings over time, but with a long investment horizon. That doesn't mean they won't fall more over time, they possibly will. However, I can't be sure of that.
Based on current sentiment, I also fully expect to see more downside with extreme volatility a feature for some time to come. However, it would not be the first time that sentiment has been radically changed overnight by some unexpected positive development. The truth is, none of us will ever know and we can only invest on the long term fundamentals presented to us at the point in time you make your investment.
As for property,well it's definitely got some falling to do. HSBC have reduced valuations on many of the properties in my area by 15% this past 3 weeks alone. This is backed up by the Centadata info. Prices are only just starting to fall.
In the financial crises we face today, ultimately ALL asset classes will fall and cash will be whittled away by inflation if left in the bank. I wouldn't be running out and buying property any time soon, unless you are prepared to see it fall at least another 15% to 20% in value. One only has to look at the way property followed the stock market down some 6 to 12 months later in all previous financial crises in Hong Kong, to see where it is headed now.
Even gold has not retraced its rise to over USD1,000 and that's been in unbeliavably volatile and panicked times.
It will all get better one day, it's just going to take some time.
Same old disease....Money
Dump valve opened taxying back past the nullah at Kai Tak.....whats that smell???
"Son, thats the smell of money"
Just remember folks "Money can't buy time".....pass that glass sir!
"Son, thats the smell of money"
Just remember folks "Money can't buy time".....pass that glass sir!
