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Alex Lo

Sometimes, the best contrarian investment indicators are those that people neglect or use for other purposes.
What if a large number of well-known people suddenly decide to sell their homes at about the same time? Shouldn’t that say something about the local real estate market as some people are taking a bearish view of it, or even the city’s future as a whole?
But we are ignoring their “signal” because many of them are heavily involved in anti-government protests.
Psychologically, in light of the heavy crackdowns they face, they should also be the most pessimistic about the current state and future of Hong Kong. Could they be right?

It’s quite extraordinary the number of well-known pan-democrats and anti-government activists who have sold their homes in recent months. Among them are former lawmakers Lam Cheuk-ting, Alan Leong Kah-kit and Lee Cheuk-yan as well as actor and internet influencer Chapman To Man-chat and the parents of jailed protest leader Joshua Wong Chi-fung.
Lee reportedly offered a big discount to make the fire sale. Others have lowered asking prices.
I have no idea about their motives and reasoning. People make financial decisions for all sorts of reasons. Many “blue ribbon” commentators claim they want to run away as many are facing charges. That may or may not be so, but we will never know.
Lam, for example, says he has no intention to leave Hong Kong. But he needs the cash to pay for his child’s education as well as legal fees fighting multiple charges, now that he no longer has a legislator’s salary following the mass resignations of the pan-dem camp from the current legislature. Fair enough!
Those sellers are the ones who have confirmed to reporters about their property sales, so presumably there are others. The British government predicts a mass exodus under the new BN(O) scheme. It’s likely a propagandistic projection designed to ire Beijing, but it’s certainly not conducive to local market sentiments.

Still, the pan-dems may be selling at a very good time. If so, there is at least a silver lining to the heavy political and legal crackdowns they are facing.
Andy Xie, an independent economist and fellow Post columnist, wrote:
“Tesla rose nearly tenfold, bitcoin fivefold, and the Nasdaq nearly doubled. The asset inflation spread from the US stock market into other areas. Stocks and properties rose across the world. Property prices hit new records in lockdown ghost towns.
Carrie Lam has no hope of restoring Hong Kong’s international image
“Two bubbles – America’s stock market and China’s property market – dominate the global economy. The Covid-19 bubble … may burst as quickly as it was formed.”
Let’s remember the super-bull run of the Hong Kong real estate market has lasted much longer, at least since the middle of the noughties.

But what got me all excited and scared was after reading a widely circulated newsletter from Jeremy Grantham, the legendary investor, freely available on gmo.com. The guy survived and prospered from the crashes in 2008, 2000 and 1989 in Japan.
Mostly likely he will make serious money from the coming crash as well, whenever it may be.
Hong Kong decries latest US sanctions as ‘insane, shameless and despicable’
“Since the summer the market has advanced at an accelerating rate and with increasing speculative excesses,” he wrote. “It is precisely what you should expect from a late-stage bubble: an accelerating, nearly vertical stage of unknowable length – but typically short.
“Make no mistake – for the majority of investors today, this could very well be the most important event of your investing lives. Speaking as an old student and historian of markets, it is intellectually exciting and terrifying at the same time. It is a privilege to ride through a market like this one more time.”

Privilege? What a strange word to use! Retail punters like me are just in it for the money, or rather the loss of it, as is usually the case, but hope springs eternal. Great investors, though, are not in the game just for profits; they see it as a psychological, moral and intellectual challenge.
As for the pan-dems, there is this old joke, in case you haven’t heard it before. A kid wasn’t paying attention in an English class, so the teacher put him on the spot and asked him to name three pronouns as examples. The kid replied: “What, who, me?”
So, while I almost always disagree with the pan-dems, this time round, I am not so sure they are wrong, for whatever reason.


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My Take

Are pan-democrats ‘calling the top’ of Hong Kong property market?

The Hong Kong skyline viewed from the Tsim Sha Tsui promenade. A number of well-known pan-democrats and anti-government activists have sold homes in recent months. Photo: Winson Wong

Former lawmaker Lam Cheuk-ting from the Democratic Party arrives Eastern Magistrates' Courts. He is charged for allegedly revealing the identity of a person under investigation. 28DEC20 SCMP / Dickson Lee

Labour rights activist Lee Cheuk-yan arrives at the Eastern Court over charges of violating group gathering ban during a Labour Day protest last year. 13JAN21 SCMP / Nora Tam

People watch the sunset from the Ocean Terminal, Harbour City, Tsim Sha Tsui. 15JAN21 SCMP / Sun Yeung

Chairman of the Civic Party Alan Leong Kah-kit meets the press at the Legislative Council Complex, Tamar, on Hong Kong and Macau Affairs Office's accusation. Hong Kong and Macau Affairs Office has sparked a storm by accusing the pan-democracy lawmakers of delaying the election of a new chairman for the House Committee and creating backlog of legislation. 25MAR20 SCMP / Xiaomei Chen

Hong Kong decries latest US sanctions over opposition arrests as ‘insane, shameless and despicable’

The Hong Kong government has lashed out at the US over fresh sanctions against local and mainland officials. Photo: AP

This combination of photo shows (top L to R) You Quan, Head of the United Front Work Department of Chinese Communist Party; Sun Qingye, Office for Safeguarding National Security of the Central People's Government; Tam Yiu Chung, Hong Kong's representative to the Standing Committee of the National People's Congress. (Bottom Left to right) Kan Kai-yan, Assistant Commissioner of Police, National Security (1) ; Kong Hok-Lai, Assistant Commissioner of Police, National Security (2) ; Choi Chin-pang, Director of National Security. Photo: Handout, AP

Chief Executive Carrie Lam Cheng Yuet-ngor meets the press at the Central Government Offices (CGO) in Tamar before the executive council meeting. 12JAN21 SCMP / Nora Tam

Hong Kong’s fate is now truly out of our hands

Pro-democracy lawyer and district councillor Daniel Wong Kwok-tung was among 11 people arrested for allegedly helping the 12 Hong Kong people currently detained in mainland China. Photo: Reuters

Hong Kong advocates for underprivileged, ethnic minority groups slam mass national security law arrests after two colleagues were among those detained

Social worker Jeffrey Andrews, vice-chair of the NGO Hong Kong Unison, was among those arrested for alleged national security law violations this week. Photo: Edmond So

Interview with Phyllis Cheung Fung-mei, Executive Director, Hong Kong Unison in Tai Kok Tsui on Suski, an ethnic minority university student who will be part of the Unison group to do a presentation at the International Convention on the Elimination of All Forms of Racial Discrimination in August in Geneva. 24JUL18 SCMP/ Nora Tam

Lee Chi-yung shares his experience on applying for CSSA (Comprehensive Social Security Assistance Scheme) Alliance, photographed in Mong Kok. 14JAN19 SCMP / K. Y. Cheng

Interview with Jimmy Singh Baljinder about his involvement in recent protests, in Wan Chai. 28JUL19 SCMP / May Tse

An advertising banner for the National Security Law seen at the Central Government Offices in Tamar.  29JUN20 SCMP / Dickson Lee

HSBC, Deloitte, Sun Hung Kai Properties among firms offering Greater Bay Area work experience to Hong Kong youth

Shenzhen, a key Greater Bay Area city, is only 15 minutes away from Hong Kong. Photo: Xinhua

Hong Kong Federation of Insurers chairman Eric Hui Kam-kwai in Wan Chai. 09SEP20 SCMP / Jonathan Wong

Newly appointed Deloitte China chairman Dennis Chow Chi-in, photographed during an interview in Central regarding why accounting firms have resigned from over 40 firms in past three months and how it can cope with the Covid-19 crisis. 15MAY20 SCMP / Edmond So

greater bay area cities at a glance data as at the end of 2019 area (sq km) gdp (US$b) population (m) 1 2 3 4 5 6 7 8 9 10 11 hong kong macau guangzhou shenzhen zhuhai foshan jiangmen zhaoqing huizhou dongguan zhongshan 1107 361 735 33 54 0.7 7434 337 15 2050 384 13 1736 49 2 3875 154 8.2 9507 45 4.1 15056 32 4.1 11347 60 4.8 2465 135 8.3 1784 44 3.1 total 56394 1655 70.8 source: china national bureau of statistics scmp

Why Carrie Lam has no hope of restoring trust or Hong Kong’s international image

Office and bank buildings in Hong Kong in July 2019. The bank accounts of some people linked to protests have been frozen. Photo: Bloomberg

Opinion


Many pan-dems have sold their homes, and a few have even fled the city to escape what they claim is rising tyranny. They may be right, at least inadvertently, about exiting a real estate market after a super-bull run that has made local properties the most expensive in the world



Hong Kong politics

Hong Kong protests

Hong Kong national security law (NSL)

US-China relations

Hong Kong property

Joshua Wong

Hong Kong economy

Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


Column