According to data from the Bureau of Estimates and Statistics, the property price index reported 394.5 points in June, which was flat on a month-to-month basis.
Compared with the historical high of 396.9 points in May 2019, it is still 2.4 points or 0.6% away.
Many people expect the property market to topple this year.
In the past, the famous analyst who pointed out that the Hong Kong property is a "chicken rib" and that the return is not as good as the investment in real estate stocks—Olu Capital President and Investment Director Cai Jinqiang accepted an interview with "Hong Kong 01". There was a new wave of rising, and he said with a smile, "It is only because people become poor, but property prices have not risen, but they have fallen!"
In the past few decades, the Hong Kong building has become a wealthy tool for many Hong Kong people. The older generation only needs to use a few floors, and today's wealth is definitely not difficult.
However, Cai Jinqiang believes that the rate of increase in Hong Kong property is gradually slower. For those with investment ability, buying a property is just a tasteless one. One of the main reasons is that the mortgage of the building is currently restricted, the leverage of borrowing to buy a property is reduced, and the rate of return in disguise is also reduced. reduce.
Cai Jinqiang, president and investment director of Olu Capital, once again pointed out that buying a real estate investment is just a "chicken rib."
(Photo by Luo Junhao)
Borrowing money to buy a flat is restricted as investment becomes "chicken ribs"
Cai Jinqiang continued to explain that if the older generation wants to fight inflation through investment properties, there is no problem.
But for those who have the ability to invest, buying a real estate investment now is just a tasteless one, because property mortgages are restricted.
"The first phase of expensive properties has already cost 60%, and properties that cost less than 10 million will be mortgaged at 80% to 90%, but at the same time, properties of less than 10 million have risen to outrageous prices!"
Although the leverage of investment in port buildings is limited, property prices are still slowly rising.
Cai Jinqiang explained, "It is possible that property prices will rise by 5% to 10% every year because of the rapid pace of printing silver paper. For example, the M2 (money supply) growth in the United States last year reached 25%. In addition, the money supply since 2008 A four-fold increase in oil prices should follow the four-fold increase in property prices."
He continued that stock and property prices can relatively follow the increase in the money supply, but only wages have not kept up.
"Therefore, people mistakenly think that property prices are rising, but in fact, people are becoming poor and property prices have not risen." He continued, the social movement that occurred in 2019 made many people think that property prices would fall, but in fact 19 Property prices have indeed fallen between 2010 and 20, "because the property market should normally rise by 10% to 20% every year, but it has not risen in 19-20 years. It has now accumulated no increase for two years, which means it has fallen." Cai Jinqiang added, Hong Kong's property prices have not risen for two years. Assuming a 5% to 10% increase this year, relatively speaking, they have actually suffered "heavy losses."
Cai Jinqiang believes that buying local real estate stocks is more worthwhile investment than buying a property.
The picture shows the "Shanghai IFC" project in Shanghai.
(company picture)
Buying Hong Kong property stocks is better than buying a property
On the other side, property prices have repeatedly surpassed the tops, but many real estate stocks have remained indifferent.
Cai Jinqiang instead believes that the opportunity to enter the market is created. "Buying a property for rent only has a few percent interest. It is better to buy Xindi (0016) or Cheung Kong (1113), which has a relatively stable cash yield of a few percent (dividends). Because of the fact that Xindi and the Cheung Kong family The financial strength is amazing. When stocks fall, they will pay more dividends for the sake of face. There is a deadlock.” As for the distribution-oriented real estate investment trusts (REITS), he does not recommend buying them, because there are not too many surprises.
As for whether mainland real estate stocks will have more investment potential than Hong Kong real estate stocks, Country Garden (2007), as the first-tier company, has only 4 times the interest rate of 6%.
Cai Jinqiang emphasized, "(The domestic real estate) is not speculative at all, because the risk is too high, and there will be major adjustments at any time. Evergrande (3333) is a hanging sword after all, more than a sword." Unless the investor's investment deadline. Very long, about 3 to 5 years, otherwise it is difficult to obtain 2 to 3 times the profit.
Cai Jinqiang believes that the domestic real estate industry may have to wait until the super-giant leading developer "explodes" before the policy has a chance to relax.
(Photo by Luo Junhao)
The central government does not want to borrow the real estate valley economy anymore
In the past, China’s poor economy would stimulate different industries by stimulating the property market.
Nowadays, the market capital chain has not been loosened, and the People's Bank of China has reduced the RRR to stimulate the economy, and at the same time, it has implemented suppressing measures on the internal housing sector.
Cai Jinqiang believes that the central government does not want to re-use the real estate "valley economy". It is always worried that property prices are too expensive, which will cause social instability, which will worsen the disparity between the rich and the poor and affect the birth rate.
He continued, "A comprehensive reduction in the RRR does not mean that the central government will loosen the real estate. Real estate needs to wait until there is a "big guy" to die before there is a chance to relax. It will be politically based in disguise, so it is hard to predict that the central government will not be Untie it."
He also pointed out that the main reason for the RRR cut was the central government’s dissatisfaction with GDP growth, not a big blow.
The GDP growth in the first quarter reached 18.3%, which is actually an imaginary number. The compound growth rate for the two years after adjustment was only 5%.
While the GDP in the second quarter was 7.9% on the surface, it was only 5.5% after adjustment.
Compared with the 6% GDP growth in 2019 before the epidemic, China’s goal for the next 15 years is to double the national GDP by 2035.
To achieve the goal, he analyzed that "China's annual GDP needs to increase by 4.7%, which means that the GDP in the first five years must reach 6%, the second five years must reach 5%, and the third five years must reach 4%. If it has not reached 6% in the first five years, the pressure will be great in the future. Therefore, the family needs to release water to ensure that GDP growth in the second half of the year will be about 6%."
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