I’m no expert in the captioned topic by any mean. Just being a regular folk on the street that read news sometimes. Yesterday, I read news that 2 exclusive apartments at the top of a new skyrise at Kowloon MTR station (a subway station) is targeting to be sold at a jaw-dropping price of HK$40,000 per sq. ft. (roughly US$5,200), it just kinda insane! Actually, I can see that building from both of my home and my office (this week), cos it is located at the edge of the Victoria Harbor. It composes of 2 buildings with 70+ floors at least. I don’t know the English name of that building yet, but in Chinese, it is called (天璽Tin Sai), 璽 is the Royal Stamp from Emperor, so the name of the buildings literally means: The Royal Stamp from the Heaven. Considering that the price they are charging, the name kinda fits the bill.
Nonetheless, I think it is just the greed of local real estate developers that is driving the market. However, come to think of it, they can’t be blamed as there are people insane enough to pay that price for a piece of this kind of man-made ‘la-la land’ up in the sky. I guess the potential buyers must be those ‘newly-rich’ mainlanders from China. Cos, those really rich local tycoons won’t be fooled by this kind of deals. They prefer to buy independent houses or mansions in the mid-level/peak/south side of Hong Kong Island. Well, as some economic experts have cited that Hong Kong is now a 20-80 society, the rich 20 %( or 10%) are getting richer, and the rest are getting poorer. The local real estate market simply reflects that.
Some of my coworkers asked me why I rent instead of purchase an apartment. I think there are a lot of reasons for that. One of them is that I don’t think the high price of real estate in Hong Kong is justified in the long run. I think Hong Kong’s economy has already peaked before 1997. The quality of current local political leaders with their limited and narrowed vision, their hesitations in making decisions, their cozy relationships with tycoons, etc, I’m not very confident in Hong Kong’s economy in the long run (in terms of decades). In addition, Hong Kong’s population is getting older, the newly immigrants are mostly less-educated and poorer, and the current speed of development in Shenzhen, next door in Mainland China, etc, I think that the price of apartment here may still rise in the short run, but it will not go on forever. So, spending a fortune on an expensive apartment (though those that I can afford to buy are not expensive one) and got stuck for years are not a commitment that I choose to take on. I feel more comfortable to have my money in other forms (like stocks, funds, fixed deposits, cash) than an apartment. Also, consider that current quality of new apartments, which is high in concept and style, but low in quality and usage, even if I’m going to buy an apartment, I think I would prefer those older apartments (>10 years old) in the secondary market than the new ones.
To people who are not living in Hong Kong, many new real estates have TV ads that just amazing in the way that, without viewing the last 2 seconds of it, you would not know they are selling apartments (cos, they usually will put the name of the place and maybe a far away night view of the building at the end of the ad). Otherwise, all you find the ads are anything but apartments, like beautiful young Caucasian women, couture, gowns, horse-riding, scenes of landscape of countryside somewhere in Europe, castles, ballroom dancing, Caucasian butlers, which are ALL ‘absent’ in the tiny apartments (versus the feeling that you may get from the ads) in their buildings or view from the windows outside of those apartments. I wonder who are the genius creating those ads and who are the wise guys/gals accepting them. Do those ads really work? Has anyone been inspired by them and really buy those apartments after view those ads? I really wonder……
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