London townhouse sold for huge discount; the UK, Hong Kong, Dubai and Calgary markets have bottomed out; Luxury resort in the Bahamas goes broke; Irish property prices have fallen 52 percent and a British Member of Parliament forgets he paid his mortgage off.
Volatility still rules the property markets – although when the term “volatility,” started to mean “dropping prices,” remains a mystery. A few interesting reports from the property investing world make disturbing reading for some markets – particularly some of the emerging markets.
The Citi Private Bank report commissioned by Knight Frank shows that the largest drops in residential property prices were in Hong Kong (-26.8%), the Home Counties (-19.4%), London (-16.9%) and Dubai (-19.1%).
More on Property Crash Hot Spots – London Dubai and Hong Kong
Question: What if you want to invest in property-mad (and low tax) Hong Kong but don’t have the requisite millions to buy a flat on the Peak?
Answer: You can buy a small flat in Sheung Wan or Sai Wan for under 2million HKD (about 250K USD) and with low mortgage rates realize a positive flow of about 3% per annum. Hire a property manager and you still realize around 2.5%.
Who is buying luxury properties in Hong Kong and are they to show or grow their money? According to two high-end property professionals, it is a little of both.
Alex Chan, Manager of Residential Sales for Colliers Hong Kong said that high-end properties in traditional areas such as the Peak, Mid-Levels, Repulse Bay and Stanley are great buys ‘cause the government isn’t releasing any more land in these areas (or if it does it’s once every couple of years). So, it’s kind of like buying a townhouse on the Upper East Side of Manhattan- they’re not going to build out into the East River, nor are they going to fill in Repulse Bay anytime soon. So, what you see is what you get, and that means appreciation.
