The Hong Kong property market is reaching a record high and flat sales have reached a 10-year peak.
Whoever speculated that the current policies could cause housing prices to crash every year, missed out on a 50% increase in their net worth.
Investors know all too well that a very fine line just separate the boundary between a gold mine and the pits.
For property owners happily counting the money that is rolling in, it is the best of times. It is however also the worst of times for the left-with-no-choice folks who needed to rent or buy.
Whatever the media said about the property frenzy in Hongkong, well that is seemingly true.
Many owners who had chosen to cash out earlier are now regretting and perhaps even struggling. It is painful for those who read the market wrong. Sometimes the market can be unforgiving.
Rent for a small Sha Tin flat is HK$11,000.
Rent for a 500 sq ft unit housing estate in Metro City Plaza is close to HK$15,000.
With over 6,700 units, mainly small flats, Metro City Plaza is one of Hong Kong’s biggest housing estates,
Supply is tight and not many units are available.
But it was not so long ago that the former Godsend chief executive Tung Chee-hwa single-handedly ruptured the property balloon and caused prices to halve.
Household debt as a proportion of GDP has surged to an uncomfortable 64%, so is it any wonder that a typical family cannot afford a flat costing over HK$20,000 per sq ft?
The Monetary Authority chief has vowed to act, should the prices of small and medium-sized flats continue its surge to dangerous levels. Perhaps a hint of mortgage tightening may be in the works.