This Chinese New Year we went back to my hometown in Hong Kong. The last time we did so was seven years ago in 2018.
Same as previous times, we booked the hotel near Victoria Park. One room offered unblocked seaview of the Victoria Harbour so we could watch evening fireworks with relatives on the second day of Chinese New Year.
Victoria Park Chinese New Year flower market
The Victoria Park Lunar New Year Fair was the biggest in Hong Kong. This year there were 395 stalls selling flowers and dry goods.
The first time I found bargains there was back in 2014 (Read “Finding great bargains in a Chinese New Year fair”). Good buys were aplenty in the wee hours of the morning – right before the flower market closed on the first day of Chinese New Year.
“Sit back and wait for the demand to dry up. Have patience if you are looking for real bargains. Your patience will be generously rewarded.”
“When a residential project is newly launched in a robust market, we see buyers rushing in to buy at full price. When developers start giving discounts, some are motivated to buy. As prices keep coming down in a downturn, buyers decide to hold back because they expect prices to drop further. Gradually, there is not much buying interest because those who want to buy have already bought. Finally, the market leaves only the value seekers waiting for the sale that is worth waiting for. They take their time to go in and pick the real bargains.”
– Vina Ip, Behind The Scenes of The Property Market
From the hotel window, I saw droves of people heading for the flower market on the eve of Chinese New Year. After dinner, the place was jam-packed with visitors doing last-minute shopping, the later into the night, the bigger the crowd.
I got out of bed at 3 am. The outdoor temperature was 12 °C – a 20°C difference when we left Singapore 17 hours ago. Under four layers of clothing, I was still shivering.
Finding bargains at the flower market
A quarter of the stalls had closed for the day. People were heading home from the flower market. I spent the first hour walking around, taking note of the prices for potential buys.
Two pretty girls invited passers-by to play scissors paper stone: If you win, you get a windmill for free, or you pick one at a discount of HK$10 (S$1.74). I bought a metallic color windmill with Christmas lights.
Price of orchids was lowered to HK$100 for three pots. After bargaining, I bought two pots at HK$50 (S$8.7).
At 5 am, an announcement repeated through the speaker.
“The flower market is closing. All stall owners should stop selling and start packing.”
One flower stall owner shouted, “Ten dollars (S$1.74) for a bunch of flowers. Last chance to buy. The officers will be here any time. Flowers will be donated to old folks’ homes. Act fast! Last few minutes left … 5 minutes … 3 minutes …”
What a sales tactic! How to send all leftovers to old folks’ homes during Chinese New Year?
Suddenly, a group of uniformed officers appeared and ordered all buyers to step back. With the owner inside, they quickly cordoned off the stall using CSI masking tape. Should I flee the crime scene with unpaid lilies, carnations, sea lavender and baby’s breath? Still in shock, I managed to pay despite the masking tape.
Some stall owners simply discarded unsold stock. I joined others to pick budding flowers and “rescued” a huge branch of peach blossoms. Carrying everything back to the hotel by myself, I was sweating buckets.
Fortunately, all the budding flowers came to full bloom at my mother’s place a few days into Chinese New Year. The timing is right!
You can’t time the market?
In 2005, a friend relocated to Hong Kong bought a leftover unit in a prestigious condo directly from the developer. By 2019, the housing price index has increased 250 percent. The value of her home jumped three times. The market is crazy. She decided it’s time to sell.
However, people around all said it’s a big mistake to cash out from the property market. Prices are still rising. One day when you are sick of renting and want to buy again, you can only buy at a higher price.
During the pandemic, governments started printing money to fund relief packages. Cheap money from banks inflated asset prices. Property prices shot up in 2021.
See, I told you prices will continue to rise.
Then housing prices suddenly dropped in October 2021.
Don’t worry. Prices are correcting before going up higher. Only 54 percent of Hong Kong’s 7.4 million population owns a home. This is not counting purchase power from the cash-rich Chinese.
By the end of 2024, home prices are down 30 percent from the peak. Prices are still correcting, with no bottom in sight.
Sell and cut loss now before it’s too late.
But prices have gone back to 2016 level. After fees and taxes, those who bought in the last eight to ten years will suffer a loss.
The Chinese believe that victory in wars is all about timing (天時), location (地利) and people (人和). Beware when people say “you can’t time the market”. It is not “the market can’t be timed”, but “they can’t time the market”. In other words, they cannot tell good from bad times to enter or exit the market.
Don’t blame the timing. Blame the people.
Prices used to be that high!
When I decided to cash out and sold my property portfolio, many said “it’s too early to sell”. During economic recessions or financial crises, the same people would tell you better cut loss now before it’s too late. Never mind you bought at a much higher price.
Isn’t this strange? No one would care about the time and price level you acquire your assets. But they would discourage you to take profits in time but encourage you to accept losses later.
“Paper profit is not a real profit. But paper loss is a real loss. A loss that hasn’t been realized doesn’t mean it does not exist.”
– “When a fling becomes a thing”, Propertysoul.com
When I was bargain-hunting in a slump market, I often heard owners saying,
“Although the valuation is $500,000 now. It used to worth a million,” recalling the good times with a sense of pride on their face.
But why didn’t they sell at $700k or $800k when they still could? It might be impossible to make the maximum profit. But at least they made some money and didn’t have to suffer a loss.
“花开堪折直须折，莫待无花空折枝” -《金缕衣》
(When the flowers are blooming, pluck them now. Don’t wait till you have to cut off the flowerless empty branches.)
Why can’t they get it right?
Most people cannot make money from properties. Because they own only one property at any time. Furthermore, they buy and sell at the wrong time.
For one, it is difficult to profit from one’s home.
When prices are high, they need to buy a home. While the market is hot, they need their home to stay and can’t sell. Or worse still, they sell their home at a high price and buy a new home later at a higher price. When the market is bad, they find they need to sell their home bought overpriced.
The same goes for investment properties.
For a long time, many rich Hong Kong people lived on a portfolio of rental properties. The yield was good. Capital appreciation was even better. The landlords enjoyed their financial freedom. Life is great!
Then interest rates climb. Buyers disappear. Prices drop. Banks call loan (demand repaying of loans in full).
Food for thought
Times are bad. Hong Kong people are spending money in nearby Shenzhen. Street shops are half empty. Asking prices of shops in prime districts are halved.
Despite all these, the boss of a Hong Kong café in Tsim Sha Tsui is expanding. If we don’t buy the shops to expand our business now, when?
“However, not many people have the guts to be a true contrarian, both in life and in investment. Most people do what the majority of people are doing, but they are expecting above average results.
Experienced investors don’t ask around for opinions, and they don’t need reassurance from others. After all, they make money not from following the path of the crowd, but from deviating from the course of the crowd.”
– Vina Ip, Behind The Scenes of The Property Market
My book Behind The Scenes of The Property Market is available for preview and order online.
Check out my new online courses How To Buy Good Quality Properties and Buy The Right Condos.
If you need advice on property matters or residential properties in Singapore, you can check out my one-to-one consultation service.
Leave a Reply