just in in-tray, for your continued education
player 1: Jay, How can you say HK real estate really cheaper than 1998? Where did you get that erroneous figure? HK prices are unbelievably high today, relative to any yardstick you choose.
player 2: easy to say hk real estate is cheaper now than at asian financial crisis depth
because i bought my place in november 1998 - feb 1999, finally closed june 1999, for hkd 8.5 mm
when gold, the one true and elemental money, was usd 270/oz at that sorry time
4046 oz gold = apartment in 1999 june
in the interim, gold (1120) has gone up 4.14 x
today, if one wants to sell the abode, should get hkd 26 mm, and if wishes to buy same sanctuary, may necessitate hkd 30 mm
i.e. apartment only went up 3.05-3.50x
meaning
3213 oz gold = apartment today
and ... we know gold is dirt cheap at 1120, thus, logic follows, that the apartment must be less than dirt cheap
especially given that cash is garbage, takes usd 1 billion deposited in hsbc to be able to earn enough interest income per tragic to buy one dismal big mac happy burger meal
whereas is takes hkd 75k to rent same abode should one wish to embrace ocean frontage while brushing teeth
under the circumstances, we must seriously challenge the idea that hk real estate is 'expensive' and truly appreciate that
(i) cash is crap, (ii) gold is true and truly cheap, and (iii) hk real estate is under-valued against gold
caution to all wagering aganist hk real estate 'bubble' and betting against asia real estate 'mania', one may well be out of alihgnment with the force.
it could well be that what used to be a 50k rental place sported a 26 mm old asking/transaction price, but rest assured that such apt now asks and transacts at 75k rental, and easily justifying a 30 mm ask (maybe 28 mm transaction), so regarding the below quoted feb 1st news tale on affordability and bubble, could well be that rent will rise pervasively as opposed to price would fall precipitously. must watch and brief.
another thought ... when one is happily 68-100, what on earth would one be doing in colorado and anywhere with no population to run into? would one not rather have live-in nurse to change diaper and pamper bottom? should one seriously propose to be pampered anywhere in n.america?
surely not, after thinking through the issues, certainly.
koh samui, chiang mai, etc come easily to mind, and better to do so while landlording in epicenter of universal freedom island hong kong, surely?
player 3: Just met with the head of a very large US Bank. Same mantra: bearish US, bearish Europe, bullish Asia.
They have had floods of employees seeking to relocate to HK / Singapore.
Not happening except for Private Banking and/or very good traders.
If you are an Investment Banker with no knowledge of Mandarin, you are out of luck.
If you're long China real estate, you've been smart. If you get longer today you'll be even smarter (and richer) in the future.
Is simply everyone on the same side of the boat?
There is absolutely nothing contrarian about being long HK / China today. That is for sure.
Is all the good news priced in?
I brought up the dearth of school places for kids in Hong Kong - for those speaking English.
The banker told me that this was the exact same constraint in Geneva and Zurich.
Zero places available to place kids in schools there.
player 2: Always difficult for any society to take in large (relative to local population) group of refugees, be they boat or yacht people. Between zurich n hk island, hk might prove more welcoming, enthusiastic, and flexible.
player 1: Is there such a thing as buy low, sell high in real estate?
The world’s most overvalued residential housing markets globaledge.co.uk
player 3: The Hong Kong price change from 1997 is a bit misleading.
1 - it measures from the very top of the previous bubble.
2 - Hong Kong Island prices are at record highs, it is only in the New Territories where prices have not returned to the highs made in 1997.
So it is all a function of how you measure it and from what point. If you took the starting point from 2000 (10 years ago), Hong Kong's percentage change would look very different, especially if measured only in regards to Hong Kong Island.....
As for the US, I would argue that the average masks massive differences. It is hard to argue that San Francisco is undervalued, especially given annual costs of maintenance, insurance, taxes, etc.
player 2: it is intuitively obvious to the most casual of passing observers on very fast horseback through the thick of fog that, in so far as hong kong is concerned, (i) hong kong is under-valued relative to a lot of god-foresaken places, so (ii) hong kong can, should, and probably will rise quite a bit more, at least much more than the bears can dream, and (iii) the way to lose money in hk real estate is to over-leverage and get a margin call which by its nature is never timely, because (iv) even hk idiots and perhaps especially hk idiots can buy low and sell high, or, simpler, buy high, seller higher still.
i have become a believer and do not see the upside in wagering against hk real estate.
player 1: I measure it in money out of my pocket, Mac.
Johnston Road, Wan Chai, Chinese Estates’ York building, has 650 s.f., one bedroom for $6.5mn (that’s US$838k) on the market, great view of dirty old buildings. I don’t care if that’s up or down from 10 years ago. It wouldn’t hold Karolyn and my wardrobe.
Maybe mainlanders will come in and buy all of HK out, like the Japanese in the 80’s did in the US…
player 4: To me at least this seems to be on the extremely high side.
But with zero interest rates who knows.
player 2: How much was real estate in switzerland in 1938 worth to the german jewish family?
With whatever is coming down the pipe, namely monetary debacle, political tyranny, economic chaos, and financial looting, how should wanchai (marc, pay attention, WANCHAI!) be valued?!
player 4: Agree and a flat on top of Neptune [bar in wanchai] is priceless.
player 1: The better value might be a flat atop Nana Plaza.
player 4: that for sure.
player 5: We have 60,000 mainlanders per year coming to hk...60k.... They gotta live somewhere, so a high priced flat in wanchai is fine...
player 1: Plus all those under-employed investment bankers from the west… |
