The rental return of the property market is similar to the fixed deposit.
The political situation in Hong Kong has been faltering and there have been demonstrations on weekends. However, the SAR Government still has no solution to this problem. It only allows the police and the people to fight each other and stimulate the further fermentation of the people. I believe that many people, like Lin Riyan, have made the news uneasy for the news, and they have no mood for work and entertainment, let alone investing in stocks.
The turnover of Hong Kong stocks continued to be sluggish. Yesterday, the turnover of the main board only recorded about 60 billion yuan. In early July, it was even lower than 56.2 billion yuan. On the other hand, the property market seems to be in a balanced time and space, trading highs, and property prices continue to be at historically high levels!
For example, in the recent launch of the new market in the New Territories, the overseas development of Tai Po, which was launched by China Overseas Development, has pushed 184 more people in the past weekend, receiving more than 830 votes and oversubscribed 3.5 times. Another OMA OMA, which was developed by Wing Tai, launched 83 groups and received more than 100 votes. Although the second-hand market turnover is not as good as the primary market, it still rose by about 5% year-on-year, a five-year high.
In addition to the increase in volume, the price has also risen. The latest figure of the leading index of the Central Plains City is 189.77, which is about 1.9% higher than the previous month. It is only one step away from the historical high of 190.48. In addition to residential transactions, big-handed sales also have good results. CB Richard Ellis data shows that there have been at least 10 large-scale purchases of more than 300 million yuan in mid-June, involving commercial sites, serviced residences, industrial buildings and shops.
In the face of such a peculiar phenomenon, there are many different opinions in the market. One is because the government has suspended the revision of the Fugitive Offenders Ordinance. Hong Kong people who have a building in hand do not have to rush to the seller to leave, and no one in the building can finally enter the market with confidence. If this is the case, then those who have the floor should really thank the demonstrators who have struggled to fight out. However, the amendments have caused serious social tears. I do not know when it will be accepted. Whether the outflow of funds will continue is still unknown.
In addition, another statement of the booming property market is because the Sino-US trade war has eased, and the market is relieved. But will China and the United States end up with this? US President Trump is certainly an incalculable wild card. President Xi Jinping also has political and economic considerations. The prospects are unpredictable.
External risk of asset appreciation potential
The last one, of course, is to count the Fed to cut interest rates. In the first half of this year, many of my friends are still embarrassed. The interest rate hikes have increased the cost of their mortgages. It is expected that this rate hike cycle will end soon. Although Hong Kong banks may not follow interest rate cuts in the second half of the year, H has taken the lead in reflecting expectations. Earlier, Hong Kong banks were once tight. According to the Hong Kong Association of Banks, the one-month interest rate related to mortgages rose to 2.99% in early July. It hit a new high of more than 10 years and only dropped back to 1.87% this week.
If you want to go deeper, the factors given in these workshops can actually be applied to the stock market. Why is the stock market trend not following the property market? I believe this question, even the top economists have not answered. The performance of local stocks has been decoupled since 2009, and there is basically no logic at all. Lin Riyan looked at the recent second-hand rental transactions. The Quarry Bay Junhao Peak rented 62 yuan and the rental return was 2.7%. The Cheung Sha Wan rented 59.5 yuan and the rental return rate was about 2.3%. In comparison, many of the six-month time deposits provided by various banks in Hong Kong have already enjoyed an annual interest rate return of more than 2%.
Buying investment requires a variety of risks and costs. The expected rental return should be reasonable compared to the bank’s time deposits. However, the difference between the two is increasingly close. Why do investors still have to buy a flat? There is only one reason. Many Hong Kong people are still convinced that the property market will continue to rise. Therefore, they do not care about recurring income. They only value the potential of asset appreciation. However, the potential for asset appreciation is affected by different external factors. Therefore, market participants must measure personal acceptance. The ability to risk.