Major Market Adjustments Present Opportunities to Home Seekers (Part II)
Iam optimistic about the future of Us-sino relations. By calling it a trade conflict instead of a trade war, the Chinese government is already taking action to deescalate the situation. In this globalised world, a tariff-driven trade war with China is bad news for American consumers too. As the conflicts drag on and commodity prices start to rise, the Trump administration and its policies will be put to the test. This is a conflict that benefits no one, and who knows, perhaps it'll be resolved during the Trump-xi summit in November. Trump has already predicted that he will come out of the meeting victorious.
Known to be an arrogant narcissist with an aversion to discretion and planning, Trump isn't a widely respected or feared figure in international politics, to say the least. Domestically, he and his cabinet are also faced with a lot of challenges. As the Democrats took back the House in the midterm elections, they will be sure to reopen investigations into election scandals such as the Trump-russia collusion and the Stormy Daniels payoff. It's a tough situation for any leader, but perhaps particularly so for Trump, whose erratic behaviour, broadly condemned policies and constant firing of employees have cost his cabinet most, if not all, of its competent and experienced members. I believe that as he faces challenges and criticism from all fronts and keeps alienating allies, he will become less of a threat to China.
As for the Fed's interest rate hikes, they are most likely to happen in the coming year, but whether more rate hikes will follow in 2020 is anyone's guess. Given that Trump has personally pressured the Fed chairman to curb the rate hikes, if the stock market experiences a major adjustment (which is very possible) or the US economy suffers from the ongoing trade conflict in the future, the end of rate hikes could be a real possibility.
Based on these factors, I reckon Hong Kong’s housing market will stay relatively stagnant before Chinese New Year, and as a portion of Home Ownership Scheme applicants return to the private market and the negative effects of market-suppressing forces fade out, sales numbers will go up again. For serious home seekers, it would be wise to make your move before the market bounces back. The housing market index may be going down at the moment, but you’re not buying an index—you need a real home to live in. When the index hits the bottom, there might not be a home to suit you; on the other hand, you may not find your dream home before Chinese New Year!
As many home owners affected by the current market pessimism are slashing prices by 15 to 20%, prospective buyers should seize the opportunity and act fast if they come across ideal properties.