Congratulations on getting rich! This column is meeting readers for the first time in the Year of the Horse. The author believes that as long as one can distinguish right from wrong and understand the world situation, one can naturally accumulate wealth. Or, at the very least, one can avoid making too many wrong decisions.
For example, buying a house is one of the biggest decisions many people make in their lives. The author does not have a crystal ball and finds it difficult to judge the trend of housing prices in the coming years. However, if we look at ten or twenty years, it is believed that the chances of prices rising are still greater. Moreover, as mentioned in previous articles, even if you don't buy a house, you still have to pay rent. So even if housing prices remain flat or even slightly decline in the next eight to ten years, considering the rent, buying a house would still be profitable.
No one knows the future trend. But at least in the recent past and over the past year, the trend of housing prices has been quite good. There have been many pessimistic voices in the market over the past few years, but since last year, the situation has changed. Some believe it is just a &#34;false rise,&#34; which is quite laughable.
<h2>The Year of the Snake Housing Market Breaks Free from the Previous Three Years of Decline</h2>
Looking at the housing market in the Year of the Snake, new property sales have been good, and buyers are relatively aggressive. In terms of second-hand housing prices, the latest Centaline City Leading Index (CCL) is 149.4 points, rising 1.5% in a single week, which is quite exaggerated and the largest weekly increase in three years. Media commentary suggests that this is related to the strong sales of the New World (016) West Sand project. Of course, weekly figures may not be accurate; however, over the past month, the CCL has also risen for four consecutive weeks, accumulating a 3% increase, changing the previous &#34;up and down market&#34; pattern. Looking at the entire Year of the Snake, the CCL has risen nearly 8%, which is quite strong, but there are still many skeptical voices in the market. Historically, this is a signal that the housing market has bottomed out.
At the same time, the increase in the Year of the Snake has allowed the Hong Kong housing market to break free from the previous three Lunar New Year declines, and this increase is the strongest since the last Year of the Rooster (2017); previously, in the Year of the Dragon 2024, the CCL fell by 4.4%, in the Year of the Rabbit 2023 it fell by 8.1%, and in the Year of the Tiger 2022 it fell by 15.1%.
<h2>Housing Prices Are Still Far from Their Peak</h2>
Of course, housing prices are still far from their peak, but this also means that at least housing prices are somewhat more affordable now than before. The current CCL level is the highest since the end of 2023, but there is still about a 4% gap from the low point before the 2023 reopening (around 156 points), and the historical high is around 191 points (August 2021), which is still about 32% away, certainly not something that can be challenged in the short term.
In terms of the Gregorian calendar, two months is not enough; by 2026, the CCL has risen by 4%, and note that the increase in both small and large units is similar, showing a comprehensive upward trend. However, by region, the increase in housing prices on Hong Kong Island is about 6%, which is significantly better than other regions.
In hindsight, this increase seems to be due to the bottoming out of mortgage interest rates, which then boosted market sentiment and triggered a buying spree. After the U.S. cut interest rates, Hong Kong's interbank rates also fell, and banks lowered their prime rates. Mortgage interest rates bottomed out in May last year, and the CCL also roughly bottomed out around that time.
Note that the current housing market is characterized by &#34;price and volume rising together.&#34; The number of first-hand and second-hand transaction registrations in the Year of the Snake is nearly 73,000, significantly up from the 57,000 in the Year of the Dragon, and the number of transactions has risen for three consecutive Lunar New Years, reaching a new high in four Lunar New Years.
<h2>Pessimists Lack Sufficient Evidence</h2>
Of course, pessimists may argue that many people are financially constrained or have a pessimistic view of the market, or plan to emigrate, so they are waiting for the right moment to exit. However, please consider this: with such a large volume of transactions, yet housing prices can still rise, would you say that this is a buyer's market or a seller's market?
Of course, those planning to sell their properties can also benefit from the rebound in property prices and can even &#34;reverse the price&#34; at any time. However, this also provides new momentum for the property market.
Last year's economic data in Hong Kong has indeed rebounded, and the prevailing pessimistic opinions clearly lack substantial evidence. In addition, developers have been relatively restrained in their pace and pricing of new projects, which has not &#34;shaken&#34; the property market, largely because most developers are in good financial condition. Of course, rents have also been rising, and the phenomenon of &#34;supply being lower than rent&#34; is becoming increasingly common. Finally, the United States has been continuously cutting interest rates; although the market discussion atmosphere is not particularly enthusiastic, the U.S. has already cut rates six times, totaling a reduction of 1.75%.
Looking ahead to the Year of the Horse, the aforementioned factors should continue. However, the latest unemployment figures released in Hong Kong have slightly increased, and it remains uncertain whether the previous economic rebound can be sustained. Additionally, inflationary pressures in the U.S. persist (although the official CPI and PCE figures seem not high), and before the change of the Federal Reserve Chair (in May), it is believed that the U.S. will not cut interest rates. Of course, these are merely &#34;risk factors&#34; mentioned as a matter of routine; the market is always uncertain, and when everyone is optimistic, that is the most dangerous time.
Patreon Author Li Shengyang
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The recent rebound in the property market has raised doubts. Despite a good trend in property prices over the past year and a recovery in buyer confidence, the Centaline City Leading Index (CCL) recently reported 149.4 points, an increase of 1.5% in a single week, marking the largest weekly increase in three years. There are still concerns about the future trend of the property market, and historical experience suggests that this may be a signal of the market hitting bottom. Although property prices are still significantly lower than historical highs, the current level is relatively affordable

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The strong rebound in the property market is still questioned; the signal of hitting the bottom is "when everyone is optimistic, it is the most dangerous" | Li Shengyang