A little over a decade ago, to say Hong Kong real estate was HOT would be an understatement. Investors worldwide were scooping up properties left and right. Now, the market is suffering the consequences. This is how the Chinese territory ended up in a housing conundrum…
Big Trouble in Hong Kong Real Estate
When it comes to investing in real estate, most people latch on to the idea of “buying low and selling high.” However, that axiom has proven devastating for property owners in the Asian metropolis…
In short, many Hong Kong real estate investors are upside-down on their mortgages. The economic climate in the region bolsters Grant’s view that buying a house isn’t an investment…
But, what are the specific factors working against the province’s recovery?
HK Volume of Home Sales is TOO LOW
As we mentioned earlier, Hong Kong real estate was booming in the early 2000s…
IN FACT, THE CHINESE GOVERNMENT HAD TO ENACT “COOLING MEASURES” TO SLOW DOWN FOREIGN INVESTORS!
These laws put levies and fees into effect to give China’s residents a fair chance to invest in private housing. However, current property sales in HK are almost at a standstill.
This alarming trend was exacerbated by the COVID-19 pandemic. But the subsequent reasons have prevented the market from bouncing back…
Interest Rates are TOO HIGH
Another issue that the Hong Kong real estate market faces are its exorbitant interest rates.
As recently as 2021, mortgage interest was as low as 1.9%. However, some residents of the Fragrant Harbor report their rates have doubled.
For that reason alone, homeowners are desperate to sell. Nevertheless, there is a final, bigger problem.
No One Can Get Property Values JUST RIGHT
Real estate investors wanted to take advantage of low prices with hopes of turning a profit. But, you know what they say bout the best-laid plans…
THE COMPLICATION OF THIS SITUATION IS THAT THE PROPERTIES HAVE NOT INCREASED IN VALUE.
This means even the most eager sellers are getting offers far below what they are asking…
Or, can afford to take.
Meanwhile, the country acknowledges the severity of this housing crisis. As such, they are attempting some counter-measures to save the HK market.
Chinese Officials’ Efforts to Revive Hong Kong Real Estate
The Chinese government hopes the same foreign investor they curbed years ago can salvage this wreck…
Remember the cooling measures we talked about? Well, Hong Kong’s Chief Executive, John Lee, has eased these “stamp duties.”
Still, real estate analysts are skeptical about whether this can turn Hong Kong around.
These owners unfortunately had to learn the first rule of investing the hard way…
“Never lose money.”
Be Great,
GCTV Staff
Disclaimer: This content is intended to be used for educational and informational purposes only. Before investing, you should always do your own analysis based on your own financial and personal circumstances before making any investment. Grant Cardone is an industry expert who has been investing for over 30 years and his opinion is based solely on his own personal experience and circumstances. Individual results may vary. You should perform your own due diligence and seek the advice from a professional to verify any information on our website or materials that you are relying upon if you choose to make an investment. Investment involves great risk and there is no guarantee of performance or results.We are not attorneys, investment advisers, accountants, tax professionals or financial advisers and any of the content presented should not be taken as professional advice. We recommend seeking the advice of a financial professional before you invest, and we accept no liability whatsoever for any loss or damage you may incur.
