No. of view: 1004
Reply: 8
Property investment is high-risk with low potential return in AI age
2025-3-1
In the past two weeks, Hang Seng Index has been rebounding rapidly from a recent low position. Finally, it passed beyond the threshold of 24,000 points. Reviewing the trend, this Index still has adequate momentum to go to a new high. On the other hand, New World’s “State Pavilia” in North Point was launched the third batch of 20 residential units for sale last week.  Finally, there were only five units sold on the first day of the public sale. This latest sales record has already shattered the dream that it will finally resurrect the property market in the near future.
While the Hang Seng Index rose and the trading volume also increased significantly, many investors made profits from short-term speculation in technology stocks. Nevertheless, the relevant investors did not take profits from the stock market and transferred their funds into the real estate market. In the past golden rule, the stock market took the lead to rise and the property market would surge later. This norm is no longer viable.
Since the stock market is gradually regaining its momentum, the transaction price of per square foot of Grade B commercial buildings in Hong Kong Island has repeatedly hit new low position. It is common for investors to rush to sell their properties at low prices due to the lending exerting high pressure by calling their loans. Earlier, a major local bank reported that many investors requested to pay only interest and postpone repaying the principal. Banks were lenient over the past six months, but they have recently started calling loans again, increasing pressure on lenders.
Based on the current situation, it is estimated that there will be more renowned investors’ properties being confiscated by the lending banks. In view of this current market condition, the government announced that it will stop selling commercial land in the coming year in the latest budget 2025. This reveals that the commercial property investment market has entered the dark ages.
The recent rebound of the Hang Seng Index is due to the rise of AI stocks, and the stock prices of famous technology companies have taken advantage of the momentum to rebound. On the contrary, the property market has continued to decline for a prolonged period. Amongst them, commercial properties are like abandoned babies. It is too risky to buy the dip while the market is still bumpy. In this era of AI, property investment is high-risk with low potential return.
|
|
| |
|
|
|
|
|
1. Trump's threat to impose 10% tariff on China 2025-03-01 13:15:03 |
|
The Commerce Ministry on Friday said it opposed US President Donald Trump's latest threat to impose an additional 10 percent tariff on Chinese imports and vowed to take "all necessary countermeasures" if Chinese entities got caught up in the levies.
In a statement, the ministry accused the US of "shifting the blame" on fentanyl flows into the United States and urged Washington to "return to the right track of properly resolving differences through dialogue on an equal footing as soon as possible."
It added China had some of the world's strictest anti-drug policies and highlighted the risks new tariffs would bring to global supply chains. |
|
2. Property value for a $100 stamp duty to $3m 2025-03-01 22:00:03 |
|
The increase of maximum property value eligible for a $100 stamp duty to $4m from $3m is expected to benefit approximately 15% of property transactions, according to Morgan Stanley. For a $4m property, buyers will now pay $60,000 less in taxes, a 99% reduction, which could help stimulate demand in the lower-end housing market, Morgan Stanley stated. Morgan Stanley noted the acceleration of the Northern Metropolis development is a crucial strategy aimed at facilitating faster land resumption from developers such as NWD, Henderson, SHKP, and CKA. |
|
3. Gov studies land departure tax 2025-03-02 15:39:24 |
|
The land departure tax on private cars is still in the planning stage and remains open for further discussion, according to Financial Secretary Paul Chan Mo-po. Speaking on a TV program, Chan noted that over 10 million northbound trips are made by Hongkongers each year, with private vehicle travel representing only about 15 percent. He believes the impact of launching a land departure tax on private cars will be relatively small. However, Chan stated the plan is still in the conceptual stage and can be further discussed. |
|
4. Residential mortgage loans approved declined 2.1% 2025-03-03 11:00:39 |
|
The total value of residential mortgage loans approved in January declined 2.1% month-on-month to $25b, the Hong Kong Monetary Authority announced. Despite the overall decline, loans financing primary market transactions surged 15.5% to $10b. However, loans for secondary market transactions dropped 11.7% to $12.2b, while refinancing loans fell 8.8% to $2.9b. Mortgage loans drawn down in January rose 17.6% from the previous month to $15.6b. Meanwhile, the number of mortgage applications increased 3.3% to 6,516. |
|
5. Canada will slap tariffs on US imports 2025-03-04 17:09:02 |
|
Canada will slap tariffs on US imports beginning on Tuesday in response to levies pledged by President Donald Trump, Prime Minister Justin Trudeau said on Monday, adding "there is no justification" for Washington's actions.
"Should American tariffs come into effect tonight, Canada will, effective 12.01am EST tomorrow, respond with 25 percent tariffs against US$155 billion of American goods," the Canadian prime minister said in a statement.
Steep US tariffs on Canadian and Mexican goods came into effect Tuesday as a deadline to avert President Donald Trump's levies passed without the North American neighbours striking a deal.
Canadian goods will face a 25 percent tariff -- with energy resources hit by a lower 10 percent rate -- while Mexican products face a 25 percent blanket levy, according to orders Trump previously signed. |
|
6. Peace is at a price deal 2025-03-05 15:09:38 |
|
Will Donald Trump and Volodymyr Zelensky sign a minerals deal when they meet in Washington DC today? Despite all the hints that the final draft is ready, nothing’s certain until it is actually signed in view of the twists and turns of late. One thing’s sure: the United States would be entitled to a share of the rare earth minerals extracted from Ukraine, just as it would be able to secure semiconductor technology and production from Taiwan through the TSMC-Intel deal. |
|
7. HK STOCK MARKET SURGED 24% IN 25 2025-03-06 11:04:49 |
|
Hong Kong’s stock market has surged 24.6% in early 2025, rebounding from recent lows, but market sentiment remains fragile as trading volumes fluctuate amid economic uncertainty, according to Nomura. In its report, Nomura noted Hong Kong’s financial markets are reacting to shifting global interest rate expectations, with the possibility of US Federal Reserve rate cuts in 2025 influencing capital flows into the city’s financial sector. A reduction in US rates could make Hong Kong assets more attractive to international investors, supporting further market stability. |
|
8. HK is top cities prime property 2025-03-07 15:05:38 |
|
Hong Kong remains one of the world’s top cities for super-prime property transactions, with 166 ultra-luxury real estate sales recorded in 2024, according to Knight Frank’s Wealth Report 2025. Whilst economic uncertainty dampened overall market activity, demand from ultra-high-net-worth individuals (UHNWIs) kept the high-end sector resilient. Despite a slowdown in the broader property sector, Hong Kong’s prime residential market is expected to rebound in 2025, driven by recent policy shifts and more favorable financing conditions. The relaxation of property-buying restrictions and potential interest rate cuts are anticipated to boost investor sentiment and transaction volumes in the coming months. |
|
