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The Market Is At A Turning Point

A report from the South China Morning Post on Hong Kong. “Fears of a drop in home prices are growing in the world’s least affordable housing market as at least five homes were unloaded at discounts of up to 16 per cent on Thursday, following higher mortgage lending rates unveiled by 11 local banks. In anticipation of higher prime lending rates, more than 10 local homeowners reduced their asking prices by at least HK$1 million (US$127,951) in the last few days.”

“One 735 square foot flat at the Metro City development in Tseung Kwan O was sold for HK$10.48 million on Thursday, down 16 per cent or HK$2 million from the asking price of HK$12.5 million.”

“‘Hit by the rise in the prime [lending] rate, the market is expecting home prices to drop,’ said Monne Yeung, branch manager of Centaline Property Agency.”

“Roy Lam, regional associate director at Centaline, brokered the sale on Thursday of a two-bedroom 399 sq ft flat at Fanling Town Centre, which sold for HK$5.3 million after price reductions totalling HK$202,000, or about 4 per cent of the flat’s value.”

“‘Homeowners are accepting greater discounts to asking prices after the interest rate rise, which generally ranges from 2 to 8 per cent,’ Lam said. ‘Homeowners believe the rise in the prime rate among local banks will hit home prices.'”

“In another example, one 821 sq ft flat at The Orchards in Quarry Bay sold on Wednesday for HK$18.18 million, down HK$3.32 million or 15.4 per cent from the asking price of HK$21.5 million. The transaction was also 12.4 per cent below bank valuation of HK$20.76 million.”

“‘The owner was worried the market would sour after the rise in prime rate so he was willing to sell it despite the price being below bank valuation,’ said Jason Yuen, regional sales manager of Centaline.”

“Meanwhile, a 840 sq ft flat at The Capitol in Tseung Kwan O sold last week for HK$10.5 million after the price was reduced HK$2.5 million, or about 19 per cent.”

“Billy Mak, associate professor of finance and decision sciences at Baptist University, said the sellers were probably under liquidity pressure and wanted to cash out early. ‘The market is at a turning point,’ Mak said. He added that home prices may drop 5 per cent in the next five to 10 months. ‘Banks may reduce valuations soon with all the signs [of a drop home price].'”

This Post Has 18 Comments
  1. Excerpts from a recent /r/Denver thread, for those of you considering moving here:

    “Downtown is an abyss of white privileged twentysomethings who are about as deep as a kiddie pool. Aside from keeping the drinking establishments flush with cash, they just take up air.

    And few of those people doing anything to contribute to this city actually being interesting other than instagramming beers at bars they’re in and talking about brunch and ramen and TaCoS. Denver is full of stifling boring people who sorta hike and sorta ski and love more than anything to wait in lines.

    I pass a lot of homeless on my morning commute. Often I, and others, see them pissing and shitting on the sidewalk downtown. Often I see them leaving a huge pile of trash behind when they move camp. Often I see them extremely high, unable to function. Often I see them being aggressive and verbally and physically abusive. Often I see them being attended to by multiple emergency vehicles. Its great that you don’t see this on your bike rides, it’s not for the faint of heart. Like I said, it’s a matter of perspective.

    I see it often around Coors Field. There are usually homeless camping on the sidewalk on 20th, and whenever I walk by there it smells like piss, and there are almost always homeless people passed out. This is where I saw a guy taking a shit in broad daylight not long ago.

    I have seen human shit in the underpass next to Coors Field, which can be a pretty sketchy stretch to walk down on as there are frequently homeless people there in groups and smoking whatever drug they happen to be on that day.

    I see it all along Colfax. Just drive down Colfax, at pretty much anytime in the day, and you will often see homeless people fighting, yelling, camping, doing shady shit.”

  2. Move Over Denver, Colorado Springs Might Have The Hottest Housing Market:

    “in the state’s second largest city, home prices have jumped 44 percent in the last 5 years. The Colorado Springs real estate market is the second most active in the country, according to Attom Data Solutions which tracks how many people are moving in an area.

    Real estate agents couldn’t be happier.

    “It is good to be an agent at this time. It’s always good to be an agent if you like real estate, you know, I love selling real estate,” said Jay Gupta, a longtime agent in Colorado Springs.

    http://www.cpr.org/news/story/move-over-denver-colorado-springs-might-have-the-hottest-housing-market

  3. ‘Fears of a drop in home prices are growing in the world’s least affordable housing market as at least five homes were unloaded at discounts of up to 16 per cent on Thursday’

    From the most expensive housing market in the world to panic sell offs. Quite sudden, no?

    ‘following higher mortgage lending rates unveiled by 11 local banks’

    Wa? I was told here a thousand times “they” will never raise interest rates and “they” will never let shack prices fall!

    1. Hong Kong house prices post first dip in 29 months
      Financial Times-8 hours ago
      Hong Kong’s housing sector was found to be the world’s most overvalued property market and the location most at risk of a housing bubble, according to the …

      1. Finance cautions against real estate bubble

        Ljubljana, 28 September – The business newspaper Finance comments on the high demand for flats, especially in Ljubljana, warning against a housing bubble in its Friday commentary, headlined Real Estate Market Craziness.

  4. “‘Hit by the rise in the prime [lending] rate, the market is expecting home prices to drop,’ said Monne Yeung, branch manager of Centaline Property Agency.”

    All the signs suggest that Hong Kong housing prices are about to follow a similar trajectory to that of this year’s cryptocurrency crash.
    ——————————————–
    Cryptocurrencies
    Crypto’s 80% Plunge Is Now Worse Than the Dot-Com Crash
    By Michael Patterson
    September 12, 2018, 12:29 AM PDT
    Updated on September 12, 2018, 4:52 AM PDT
    – Selloff is now deeper than the early 2000s rout in tech stocks
    – Ether leads losses on Wednesday, extending a brutal September
    https://www.bloomberg.com/news/articles/2018-09-12/crypto-s-crash-just-surpassed-dot-com-levels-as-losses-reach-80

  5. ‘The market is at a turning point,’ Mak said. He added that home prices may drop 5 per cent in the next five to 10 months. ‘Banks may reduce valuations soon with all the signs [of a drop home price].’”

    Or they may drop 50% or more. Put that in your pipe & smoke it, Mak.

    1. For the Same reason, they did not tell you that oil prices would head back up to above $80. They own the MSM and use news stories to make money by getting the masses to head in the opposite direction from where they are investing and then tell the masses to buy when they sell.

    2. until they’ve started bursting…

      Because the bubble itself is inconceivable. There is no way there can be a bubble until it bursts. Then it’s all Who could have seen the unpossible coming.

  6. Mortgage rates soar to seven year highs.
    https://www.washingtonpost.com/business/2018/09/27/mortgage-rates-soar-year-highs/

    Historically rates haven’t had much impact on home prices. Probably because higher interest rates meant wage inflation as well. Productivity is stagnant so wages are stagnant, and affordability was already a problem with record low rates…

    So buyers are now looking at flat or falling home prices, record high prices relative to incomes, increasing monthly payments due to rates going up, and flat or falling rents. Sounds like a perfect storm.

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