Dear Paul - 1st, a disclaimer. Since you and Lawrence have a discussion going, I am not here to meddle. However, fyi, I spoke to a few HK residents - all property owners - as recent as last week. While they acknowledge the economic downturn, they are not in as sad a shape as some economic pundits have portrayed. Sure, there are casualties - and even wipeouts. However, there are also conservative investors who have been hogging cash for quite sometime. Like savvy investors in this country [certainly I am not one of those <g>,] they are just bidding their time. As I ve said many times before, the nature of HK economy is quite different from that of say Thailand or Indonesia [or even Singapore, as you have used in your comparison.] Property values, while it was driven too high due to speculation, has a real demand-supply dynamic to it. To me, HK RE is liken to NYC of the early 90s. By limiting its growth [thus holding back the supply,] the demand will catch up [maybe at a lower price level.] Again, to use the RE market of this country as an analogy, those who have had the deep pockets in the 90s to buy into NY, Boston, LA, SF then, they would have made out fabulously now. Also, while HKMA may have intervened in the market and the govt has tried to lessen the blow by repricing some of the leases etc, it is still a fairly ruthless capitalistic market in motion, so there is little fear about HK becoming another Japan.
Btw, I ve read a little bit about Hanke. It is indeed an interesting puzzle for him to advise Indonesia on using currency board. Personally, I think Indoesnia is a basket case unless its corruption has receded to a respectable level [while I don't follow that country too closely, I'd imagine the Surharto family still has a hand in the country's financial market.]
best, Bosco |
