The year 2024 is full of uncertainties. As the economy continues to decline, property prices have also been decreasing. Until now, property prices have fallen by 30%. In terms of rents, as the surge of new immigrants arriving in Hong Kong under various kinds of talent programs, there is strong demand for leasing properties, it pushes up the rents steadily. As property prices fell, rents rose, the return on property investment increased to 3%.
Recently, an investment expert said that he spent Hk$ 5.5 million to purchase a residential unit with a 30% discount. The investment yield return of this unit is about 3%. He stated if anyone assumed that property prices will rise by 20% in ten years, it would be a good time entering the market now.
As prudent property investors, unless they believe their investment plan will have a return of more than 30% within 3 to 5 years. 
Otherwise, they should not invest on any property. On the other hand, it is too difficult to predict the market situation over 5 years from now. Under current market conditions, the intensification of Sino-US trade disputes in 2025 will inevitably cause the economy and property prices to decline. If you personally believe this is the case, you should postpone your investment plan in this lousy year.
In addition, even if anyone believes that property prices will reach rock bottom in the coming year, it is still not cost-effective to purchase an investment property with a gross return of 3%. Currently, the time deposit rate of Hong Kong dollar and Greenback is 3.8% and 4.3%, respectively. If an investor chooses any one of two, it will be better than purchasing a property for rental income. After deducting rate & rent and management fee, plus 10% of tax expenses, the net return on property investment is only 2%.
Since the net yield return is too low, one should not buy any investment property in the market now. Taking residential properties as an example, if the gross rental return is more than 5%, and the net return is 4%, a prudent investor may consider purchasing investment properties. Based on this calculation, the gross yield return will need to increase by another 2% to meet the most basic requirements for entering the market.
Under the current market conditions, it means that the property prices should fall by at least another 10% and rents rise by another 10%, the gross rental return on residential properties will rise to 5%. By then, if the geopolitical disputes subside and the economy stabilizes, a general investor can purchase rental properties in a relatively safe environment.
