It is a prevalent blunder by procuring the wrong dip

Damon Ho

18/1/2025

The lifelong dream of the middle class in Hong Kong is to own their self-use property. Therefore, middle-classes seldom sell their properties, especially their self-use properties. This is the golden rule for most middle class in Hong Kong.

The author knows a couple that had owned their self-use property for 20 years. However, this couple observed the property prices were under a downward trend two years ago. In order to avoid losses, they sold their property for HK$ 6.5 million in mid of 2023. After they sold their property, they intended to lease a unit for three years before planning to buy self-use property again.

A property agent realized this couple sold their property and introduced them to a high-quality with river-view unit. This agent said that the asking price of this unit had been reduced from eight million to seven million, and the price was attractive.

After conducting the site visit, the couple was deeply impressed by this high-quality property. After considering this offer for a week, they decided to purchase it and successfully moved in three months later.

Since they moved into this unit, property prices have been continuing to fall. Until now, the present value of this unit has dropped to five million. Due to this colossal loss, the couple blamed each other for this poor decision.

The author analyzed this case and felt helpless. This couple made a wise decision by selling their own unit at the right time. If they followed the original planning and did not purchase any property within the coming three years, they could have avoided this downward market and saved more than two million.

In recent months, a lot of old landlords have also decided to sell their own properties which they lived in for more than 20 years. At present, the overall home-buying confidence is low. Indeed, many developers have recently opened for sale of their first-hand properties in advance of the Lunar New Year. However, if we examined their sales records, it would find that the sold units were less than 20% of the total units which were launched for sale. In addition, the supply is huge. Those who have sold their properties should adopt a wait-and-see attitude and should not rush into the market in the near future. Otherwise, it is easy to make the same mistakes as the above-mentioned couple.

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