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Reply: 9
REITs may not be a useful tool to safeguard your wealth
2023-6-17
As time goes by, folks in middle age start to face the problems of retirement. How to plan it well which will fit your personal life. This is a long-time daunting task. For general middle class, one may consider buying a second home to increase passive income. This is a viable choice but not for everyone. Due to the high property price, it is hard for middle income workers owning a second home. One might consider buying real estate investment trust（REIT）to earn steady interests for alternative.
Eight years ago,  Link Real Estate Investment Trust (Link REIT) was listed, and it has always been drawing the public attention. It possesses the managed property portfolio that provides steadily increased dividend pay-out year by year.
Consequently, this stock price was always well performance until 2019. Quite a few interest-loving people purchased its shares time by time. Furthermore, some retirees even sold out their self-use premises to purchase the Link REIT for dividend pay-out. They expect both share price and the dividend will keep on rising year by year so that it can provide sources incomes for their retirement life.
One friend of the author sold his property in 2016 to cash out $8 million and then spent $6 million to purchase Link REIT shares for dividend pay-out. In this investment. He received annually $240,000 approx. dividend and then moved to Zhongshan to retire.
Average for the purchasing price of Link REIT held by my friend is about $65. He holds this stock is for fixed term dividend pay-out. Therefore, he does not sell out this stock even when its stock price hitting record high to $99 per share in early 2019.
My friend believes that this stock's dividend will be continuously to rise year by year so there is no need to reduce the number of holdings even when its price reach to record high. However, Link REIT's share price has fallen for three consecutive years until the beginning of the year 2019. Worst of all, the company announced rights issue to raise fund in February of this year. Following the declaration, its share price fell unstoppably to recent low to $45. An average holding price by my friend is about $65, which implies its loss reaching to 31%.
So far this Year, the stock market fell continuously. Even best performance's stocks showed little gains. It was common to some stocks to perform mediocrely to lose more than 20%. Even though the housing market was also sluggish, but the price was only a slight correction. Thus, it does not seem a desirable choice by selling properties in exchange for buying stocks back to safeguard your wealth.
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1. Interest rates slow down the market 2023-06-17 14:27:37 |
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Many new properties went on sale at low prices last month, causing valuations in the secondary market to further narrow to between 0.43 and 1.02 percent. As of May, of 20 housing estates tracked, nine increased at a narrower pace, compared to rises of between 0.04 and 6.11 percent in April. That came after Hongkong and Shanghai Banking Corp, Hang Seng Bank (0011) and BOC Hong Kong (2388) increased their prime rates from 5.625 to 5.75 percent last month. The increase in interest rates caused a dampening of buyers'enthusiasm, leading to the slowing down of real estate price growth |
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2. Green residential units expected to increase 2023-06-17 17:19:23 |
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The demand for green residential units is expected to increase in the long run, JLL reported. Citing studies, JLL noted that green residential units have a resale premium of approximately 5-10%, in comparison to conventional residential units in other cities. This is even as Norry Lee, Senior Director of Projects Strategy and Consultancy Department at JLL in Hong Kong, said he does not expect to see the trend of green residential projects as it is not a major selling point amongst developers. |
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3. Hang Seng Bank prime rate unchanged 2023-06-18 10:42:40 |
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Hang Seng Bank announced that its Hong Kong Dollar (HKD) prime lending rate remain unchanged at 5.75% per annum. Its Hong Kong dollar savings deposit rates also remain unchanged. For HKD account balances with HK$5,000 and above, interest rate is at 0.75% p.a. HKD account balances with less than HK$5,000 still has a 0% interest rate. The bonus interest rate for Hong Kong dollar savings accounts, or integrated accounts with a total relationship balance of HK$ 1 million or above, is 0.001% p.a. |
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4. 父親節商場大旺 2023-06-18 23:23:51 |
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父親節周末適值天雨兼悶熱，不少家庭客轉往商場消費。新地15商場，包括觀塘apm、大埔超級城、元朗廣場等推出獨特親子互動體驗、人氣偶像音樂會及多重消費優惠獎賞，成功刺激商場人流及生意，父親節周末人流及生意按年升20%。 |
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5. Service industry reported double-digit increases i 2023-06-19 09:51:31 |
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The service industry reported double-digit increases in almost all segments in the first quarter of 2023 compared to the same period last year according to Hong Kong’s Census and Statistics Department (C&SD). Accommodation services business receipts went up by 84.5%, food services up by 81.7%, banking by 30.6%, retail by 24.1%, and administrative and support services by 21.9%. On the other hand, double-digit decreases were recorded in business receipts of the transportation (-18.7%), import/export trade (-17.5%) and courier (-12.5%) ind |
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6. HK GNI grew 6.8% in Q1 2023-06-20 08:29:06 |
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Hong Kong’s gross national income (GNI) grew by 6.8% to $756.1b in the first quarter of the year, the Census and Statistics Department (C&SD) reported. The city’s gross domestic product (GDP), meanwhile, grew by 4.6% to $716.6b over the same quarter. “The value of GNI was larger than GDP by $39.4b in the first quarter of 2023, which was equivalent to 5.5% of GDP in that quarter, mainly attributable to a net inflow of investment income,” the report noted. |
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7. Surging costs dampen demand for homes 2023-06-21 20:44:35 |
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The government’s plan to further relax loan-to-value ratio for first time homebuyers will have little effect on the residential market, as high costs continue to dampen buyers’ interest, according to CBRE Hong Kong. Surging financing costs remain the main factor hindering property buyers from entering the market, said Eddie Kwok, senior director, valuation & advisory services, CBRE Hong Kong. After a strong rebound in Q1, transaction volume dropped by 12.7% mont-on-month in May 2023 to just 4,003 units, according to data from the Land Registry. This extended the steep 31.5% decline in volumes from April. by 31.5% m-o-m in previous month |
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8. 舖位成交大幅回升 2023-06-22 15:31:23 |
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內地和本港通關，舖位市場表現好轉。利嘉閣（工商舖指出，今年5月全港錄得94宗店舖買賣登記（主要反映2至4星期前的市況），較4月的69宗反彈36.2%；料6月可挑戰約100宗，按月再漲6.4%。 該行統計土地註冊處數據指出，5月錄得94宗買賣登記，以造價2000萬至5000萬元的類別表現最標青，錄得25宗買賣佔最多，也較4月的13宗，按月飆92.3%，升幅為各類別中最勁。5月買賣登記牽涉總成交金額約19.03億元，按月微降約3.7%，該行稱主要受5月錄得的大額買賣登記減少所影響。 |
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9. Hk life insurance market improve next two years 2023-06-23 13:52:15 |
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The Hong Kong life insurance market is said to improve over the next two years but industry players should expect a bumpy journey, according to S&P Global Ratings. "Earnings for the Hong Kong life insurance industry should stabilize over the next two years, thanks to its top-line recovery," stated S&P Global Ratings credit analyst Judy Chen. One of the drivers of Hong Kong’s insurance segment is visitors from the mainland as sales are expected to maintain a strong standing up u |
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