Sunday, January 30, 2005

Hong Kong estate market funded by U.S Investors

Large U.S funds are investing in Hong Kong estate market to enjoy the higher return on the expectation of economic growth in China, instead of speculating on the currency, according to NY times.

George Soros, one of the wealthiest "fund managers" and the guy who are famous at speculation of the currency told the reporters at the World Economic Forum that the deflation in China is not bad because " the people got the goods cheaper"

Were all they said true or not? Hmmm, it remains to say. The Hong Kong estate market has already boomed too enough for the common people to buy the house themselves. The employee's salary grow much slower than the growing of the estate price. I am not a estate expert, but what I could see is that many local friends can't afford to buy houses themselves. I think it is simple to know the market from the supply and the demand. Soros may be right that the deflation in China is good for people to buy goods, but it is not the enough reason for the fund managers not to speculate, including Soros himself.

The ING fund(One of the largest funds in U.S) manager said that he consider Sun Kung Kai as one of the best estate companies in Hong Kong. He thought the stock was trading at a 10 percent discount to the value of the properties owned by the company. What I want to know is that if he lost money in the failure of investing in HK Reits several weeks before.

1 comment:

Amy Gu said...

Yes, I agree with that the banks are providing more attratable loans to the common people to buy the houses. When I did my intern in a newspaper, I interviewed some bankers, when their bank extended the limitation on the combined age of the property and locan tenor from 40 to 60 years.
But what I was worried is that it is easy to form the bubble when investers are the major force in the property market. Beijing is one of the examples and Shanghai will be later. The result may serious or not depending on the size of the bubble, but the comsumers will suffer from it anyway.