First of all, I have no
crystal ball to tell the future. I only use my best knowledge to guess what will
happen generally. My rate of sucess is slightly better than those just using
instincts and feelings to make judgements.
My statement on markets of high end and user mean that the high end generally refers to new flats and user is the second hand property. For the new flats, the prices are set by developer and many mainland investors love to buy. From the past records published by Centaline, people may easily find that the success of making profit by buying into new developments since 2004 is very discouraging. Many new flats buyers lost money or have their properties prices kept on hold when the second hand properties surge ahead. The main reason is that the developers have put a premium on the new flats which have taken off the profit margin for investment purpose.
Hence, my advice to people is to avoid the new flats, especially for those at Tseung Kwan O where the supply of new flats in near future is abundant.
From the current trend, we can easily predict that the second hand properties on Hong Kong Island and Central Kowloon, say Mei Foo will enjoy the great ride of this new wave.
For seriously assessing the validity of prices, you may consider to think about the use of rental yield which measure the rent in relation to the price. The mechanism is just like P/E ration which also tells people the state of price. This simple calculation may not guide you to make fortune as it cannot forecast the future, but the figure can tell you whether the prices are within reasonable range. The general guideline is that if the rental yield is over 3% while the saving rate is close to zero, then it gives a signal to buy. When the prices jump too much and push down the yield below 2%, then you have to take care of a possible correction. From 3% to 2%, it represents the price rise of over 30% which is handsome profit for leverage mortgage. For some people, the scale of this price rise is a real fortune.
Take care! I am optismistic about the current trend of price rise but no one can tell exactly how far it will go or how long it will happen. Patience is my last word to you.
My statement on markets of high end and user mean that the high end generally refers to new flats and user is the second hand property. For the new flats, the prices are set by developer and many mainland investors love to buy. From the past records published by Centaline, people may easily find that the success of making profit by buying into new developments since 2004 is very discouraging. Many new flats buyers lost money or have their properties prices kept on hold when the second hand properties surge ahead. The main reason is that the developers have put a premium on the new flats which have taken off the profit margin for investment purpose.
Hence, my advice to people is to avoid the new flats, especially for those at Tseung Kwan O where the supply of new flats in near future is abundant.
From the current trend, we can easily predict that the second hand properties on Hong Kong Island and Central Kowloon, say Mei Foo will enjoy the great ride of this new wave.
For seriously assessing the validity of prices, you may consider to think about the use of rental yield which measure the rent in relation to the price. The mechanism is just like P/E ration which also tells people the state of price. This simple calculation may not guide you to make fortune as it cannot forecast the future, but the figure can tell you whether the prices are within reasonable range. The general guideline is that if the rental yield is over 3% while the saving rate is close to zero, then it gives a signal to buy. When the prices jump too much and push down the yield below 2%, then you have to take care of a possible correction. From 3% to 2%, it represents the price rise of over 30% which is handsome profit for leverage mortgage. For some people, the scale of this price rise is a real fortune.
Take care! I am optismistic about the current trend of price rise but no one can tell exactly how far it will go or how long it will happen. Patience is my last word to you.
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