as night follows day will the prices of apartments/houses not fall there as their SM corrects? The stock market there moved up close on 30% in less than twelve months (from lowest point to highest), this was bound to encourage speculation due to manic exuberance by the locals. It's now what 20% off the highs? Surely their property speculation follows the same irrational pattern, there is no peculiar fundamental that will protect this and indeed any other market given the global crunch? Or am I missing the bleedin obvious?

China and Hong Kong will suffer if the US and Europe go into recession, which looks like a foregone conclusion. Much of what they supply us with is non-essential 'frippery' that is the first thing to be cut back on when purses tighten.

I didn't need it that bleedin obvious I'm just trying to get a handle on whether or not there is a pocket of resistance due to some different set of fundamentals, be it HK Japan, China...methinks it may be Mars but what do I know

there is a school of thought that japanese property will be immune as it hasn't moved up much in the last few years.I would agree with that,but it's a very hard market to gain exposure too.

Japanese commercial property is alos relatively cheap IMHO but again getting exposure to it is hard for a retail investor.There are some cracking yields available on Japanese Reits.They have definitely not seen the bubble so it therefore follows they won't see as much of a bust.germany also has some relatively high rental yields I believe,which again are a sign that they are not too far away from longterm means.

I asked this very question to Dr Bubb who as you know is into Hong kong property(eight flats last i heard).I assume that since we were in a global property spike and now correction ,hong kong prices would correct as well-he said that iho far east markets were in a shifted cycle and although they would correct at some point not in line with us/uk markets.-other posters also replied saying that the market there in somewhat different being based around a closer knit family which tends to hang on to property longer and therefore less extent of 'bubble ' type behaviour.

Imo the bust will sweep from the West taking sm and property with it reaching far east via uk/spain ,in 2009 after the froth of bejing olympics has disapated.

Had no idea he'd gone that big into BTL, how bizarre? Knew he'd bought in HK, thought it was for him given he lives there etc. Remember late last year asking on the forum whether it'd be a good idea to drop approx 50k into a HK apartment, I was shocked by how little it'll get you in terms of only being a 20% deposit for a 2 bed flat in a not so good area, London prices on speed in a tardis set for 2006 in certain areas. Question was more re. anywhere being safe, I reckon many selectively believe they've found their own shangri- la...

I heard he had 5 in HK. No matter.

It's a close one to call.

On the one hand, SE Asia will fall as the West falls.

However, The Yuan will rise big time over the next couple of decades (treble or quadruple) and this will be +ve for assets.

Japan will defo rise like Germany.

Personally, I wouldn't do it or recommend it but I could understand if some do.

Vietnam looks good - the next China, on a smaller scale.

Good call, imo. Vietnam doesn't have a "little emperor" problem: As a Pampered Generation Grows Up, Chinese Worry

Here's an excerpt from the article in today's NY Times. Worth reading the whole article, though.


"Specialists say it is too early to say whether China's "little emperors" are growing up to be a generation of self-centered autocrats, whose politics may be more aggressive than the generation that grew up under Mao, or whether they are so overindulged at home that they will be ill prepared for the competitive pressures and harsh realities of China's market economy."

next couple of decades could see the next boom here. Where is Germany rising other than in Dog boxes fantasies?

Berlin, at least.

I've lived here in Hong Kong for 9 years now and I think you are missing the bleedin obvious.
The political elite here are oh so very very cosy with the big 4 or 5 developers that its frankly sick-inducing.
The government restricts land supply 100% (they are the only true owners of land in HK). The big developers get all they want in a hush-hush rota sytem at "open" auctions. Both sides are happy.
Government gets a very high price for the effectively leasing the land and Developers just add on their building costs to a market who have little choice but to lump it.
Granted the people here are more switched on to the stock market than in the Uk but I doubt it will affect prices.
Most property here is bought with a whacking deposit or with no mortagage at all!
I do think DrBubb will tell you all about his BTL empire (8 flats) and that the property cycle here is at a different stage from the UK's.
But overall I think the biggest difference is the relationship the Developers have got with the Government here. Its in both their interests to keep prices high. They do this by restricting the land supply.

The good doctor should be doing comfortably well in HK according to this graph



Yes indeed we are at a different stage of another bubble altogether. This one should be huge. In case you are interested:

http://www.centadata.com/cci/cci_e.htm

wasn't wanting HK specifics more whether or not you could in theory find a pocket of resitance anywhere. But that's a fascinating bit of imput thanks. You mention the property cycle being at a different stage to the US and UK I can see that now. These 5% rises in cost per month highlighted on the graph and link in the above post, is that for real if so I'm guessing it must be manic simply attempting to buy anything over there atm. We've never seen anything like that

Good Doctor? BTL = scum in my book.
I do think if the US cuts their rates again this year (as most forecast) then we will see property rising further here. Remember that this is one of the first places newly rich people from mainland China head to when they get permission to escape. Most will see that a bet on property here is probably safer than in the stock market for the next few years.

Berlin growth is slow but steady from a low base.

Property on the North East Polish border where I have also invested is in short supply. 1 bed flats from example; Agents have none left on ther books in the area in which I invested. This is a result of the border controls having been removed recently and Poles renting and buying accross the border in Germany where property is a lot cheaper - for now.

It is a business though and not for those that want quick easy money. The yield I obtain is 20%, however re - investing all income to improve the property, but the expenditure will generate higher rent.


CL, people will continue to make property pay with a bit of effort and research. Hand wringing like some demented jellyfish gets you no where in life. Price fluctuations sure, but its all just short term noise designed to put off the weak and feeble.

Yes, that and the necessary depreciation of the HKD because of its peg to the USD in the medium long term.

Also unlike Europe and the US, we have managed to transform structurally in the face of the rise of China. So we are sound ecnonomically and unemployment is at all time low.

TBH Dogboz, and I've never said this to anyone on a forum, I dont believe a word that you type

that cast iron fundamental - affordability, how does it stack up in HK, or are we on a different planet? My o.p. was not nec. in relation to HK but asking, in global terms, whether the same rules/factors apply in speculative housing markets irrespective of the location.

According to the latest statistics, people in HK are using on average around 32% of their income for mortgage and related payment.

Well located land is finite. Take land in Britain. As cities, towns and villages expand they eat into green belt. In time much of this land will have its land use changed and be built on. Changing land use adds £value. Ofcourse, you don't know when or if this will happen to particular plots of land. You will also struggle to secure finance against it, so acquiring land just isn't an option for most. But if you have the money and can afford for it to be tied up for a while then it may well prove fruitfull.

Increasingly I read of calls for Hong Kong to "de-peg" from the USD and peg either into a basket of Asia currencies or to the mainland.
I cant tell what effect this would immediately have on property prices.

The peg was decided in the interest of consistency, predictability and certainty of the HKD, even though the USD's movement often go against the economic condition of HK and local interest rates are raised and cut accordingly in a way that goes against good economic sense. But this is the price we pay for certainly.

And because of the hefty price we pay, the calmour for depeg has never stopped, although the cry is much lower in the past few years as literally everybody is watching out for the peg to be switched to RMB.

Honestly I have rarely heard the suggestion of pegging to a basket of curriencies in the territory. It is almost a given that if the HKD is to decouple from the USD, it will peg with the Yuan. Few of us even give it a second thought, for very obvious political reason.

So when can we peg with RMB? When RMB is ready. When will RMB be ready? When it is freely exchanged internationally. And when will that be? Not any time soon, at least not in the next 5 years.