Pessimistic Hong Kong Real Estate Forecast

The financial crisis from which the entire world has to suffer, didn???t give the Hong Kong real estate market a break. At the real estate agencies around the city, prices have dropped 20 percent in November 2008 and this will continue in 2009 furthermore. Growing public expectations of a repeat of a 2003 slump, when the outbreak of severe acute respiratory syndrome (also known as SARS), ravaged the entire Hong Kong economy, prompted Sun Hung Kai Properties to predict last week that prices would rebound 5 percent in 2009. Lee Shau-kee, the chairman of the Henderson Land has a different opinion as he stated that the bad times have past for the Hong Kong real estate market and he also added that the worst of the world economic slowdown was yet to come. On the contrary, Stephen Riady who is the president of Lippo Group stated: ??oeI think Hong Kong will probably go down much more. It's a very volatile market. It'll go down more than Singapore???.




At the end of November 2008, a Reuter???s poll of analysts showed that the apartment prices in Hong Kong will go down 20% by the beginning of 2010 just like the prices from Singapore will go down by 21%. Even worse than that, a brokerage house specializing in derivatives called GFI Colliers stated the Hong Kong real estate prices will hit rock bottom in December 2009 when the prices will be -25% in comparison with the present prices. The vice-president stated that many landlords (starting from small to big ones) wanted to switch to cash but the prices continued to go down because they couldn???t find any buyers for their homes and banks were requesting down payments between 30%-40% compared to only 10% which was in the prior crisis period.




Beek said that: ??oeSome are off-loading at 30 percent discounts, but struggling to sell??? and ??oeMany buyers think they might as well wait another four or five months for prices to come down more???. The Hong Kong real estate transactions reached a 17-year low in November 2008 ??" down almost 87% in value from 2007. The entire territory is in recession, not just only the real estate domain; exports reached unprecedented minimums due to the continuous weakening global demand. Fully dependent on the financial industry, many people are facing large-scale job cuts at hedge funds and investment banks.




Another punch taken by the real estate market was when the mortgage rates were increased by the Bank of China Hong Kong and HSBC. An analyst at CLSA by the name of Nicole Wong affirmed that she expects that the residential prices will go down by 15% in 2009. She also stated that real estate outperformed the Hang Seng index when home prices slid in 1998 and 2001, and said that Sun Hung Kai, Henderson and Sino Land had value.




All things considered, the situation isn???t very good for the Hong Kong real estate market but hopefully in 2010 the situation will get back on a normal track not only for Hong Kong but for the entire world because the crisis affects each and everyone.

Ralph W. is the manager of www.bindoa.com where visitors can get information about Hong Kong real estate.

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Stocks Drop Due to Falling Home Prices and Increasing Foreclosures

Indications that the housing prices will continue to fall and foreclosures will go on dragging the economy down have influenced investors to sell their financial stocks which led to the drop of stock prices.




The current attitude of investors also showed that they are not that optimistic over the Obama Administration???s plan to prevent foreclosures and halt the falling housing prices.




With the trend that it is going, it looks like President Barack Obama???s signing of the $800 billion economic recovery package, which also includes the foreclosure prevention measure, has failed to provide comfort to investors




Investors were also disappointed over the lack of details provided by Department of Treasury Secretary Timothy Geithner on the administration???s financial bailout plan.




As part of its effort to alleviate the financial problem, the Obama Administration plans to release details of a $50 billion foreclosure prevention program to help modify mortgage loans for distressed homeowners.




Another factor that burdens financial stocks is the foreclosure moratorium that banks have imposed in an effort to help troubled homeowners and reduce the number of foreclosed homes.




Following the decision of its rivals, PNC Financial Services Group has also imposed a foreclosure moratorium on existing and new mortgages. PNC President Joseph Guyaux explained that the financial institution wants to help homeowners retain their properties.




After its announcement of foreclosure moratorium, PNC shares dropped by 6 percent. The trend prompted Weiss Research???s Mike Larson to question the sensibility of delaying foreclosure in the current market condition.




He pointed out the problem of delaying foreclosure in which the collateral is losing market value. He added that it is a choice of taking over a property and selling it for about $200,000 or waiting for a 90-day period of moratorium to lapse and sell the property for $195,000.




Financial stocks of mortgage insurers, regional banks and real estate firms led the stock market decline, with MGIC Investments, Developers Diversified and Fifth Third Bancorp among the top losers.




The Financial Select Sector SPDR dropped by over 7 percent while the KBW Regional Banking ETF declined by 4 percent due to investors??? concern about the stocks??? continuing exposure to home and business loans.




Meanwhile, Moody???s Investor Service reduced credit ratings on some mortgage services in anticipation of higher-than-expected mortgage losses due to unabated foreclosures and the economic recession.

Joseph Smith has been educating buyers on the finer points of Repo Homes purchase at ForeclosureDeals.com for over ten years. Click here to visit and read more advice on finding Foreclosed Homes.

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