(written on April 2011 ..comments on HK property market 2012? need some input for next week hah thanks a lott~~)
(1) 13-year high: End of property market bull cycle in 2011?
Facts:
- HK residential property price has already exceeded the peak sky-high price before the 1997 property bubble burst
- ..and is still steadily soaring. Home prices increases by 60% in 2 years.
- No. of real estate agents surged by about 40% in one year ..even my aunt decided to quit her job and join the league.
- The highest-paid fresh-grad job in Hong Kong no longer goes to doctor or lawyer — In Class of 2010, a private property investor with 100K HKD monthly income topped the list.
- In 2011, HK has the highest home prices and income disparity in the world.
Reasons:
- Shortage of land, properties and public housing
- Dominance of giant developers: win land auction everytime and construct luxury apartments.
- Influx of mainland investors and cash flow: buying in HKD is a cheap 20%-off deal to mainlanders
- Low borrowing cost/interest rate environment
- Currency peg: QE 1 and QE 2, weak dollar = weak HKD.
- real buyer VS speculators: local buyers could never pay their first installment with speculators pushing up prices.
Cooling measures:
- Quarterly land auctions: the government is proposing a regular schedule for land sales + 12 land sites release to further boost supply
- Additional stamp duty on short-term sales: sellers are subject to a 5-15% additional stamp duty if they resell their homes within 2 years to discourage speculation.
- Tightening borrowing requirement in banks: banks raised mortgage interest rate and down payment
F1oni’s forecast:
- It’s about time. Say no to Keynesian–follow business cycle and let it burst.
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(2) Why does Yen appreciate after earthquake? (March 13, 2011)
impromptuz 