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Real Estate Situation

How to be a smart lender


Damon Ho

27th May 2023

Since its border reopening of Hong Kong started from February, the economic vitality has gradually been evolving to be active, and business industries such as retailing, tourism, and real-estate were the first batch which have been benefiting from recovery. However, there are many industries are still inactive, so a lot of bosses and workers who are lack of current assets. In fact, it is usual to be asked from friends to lend money. However, how to decide whether to lend or not?

Most current borrowers are different from those in the early years. In the past, borrowers were humble when they asked for help. Nowadays, the borrowers are more aggressive, and they act like a debt collector.

One friend of mine recently encountered a comparable situation. Given day last month, the business partner of my friend asked him to lend money. My friend did not answer directly and was immediately scolded by this business partner. It appeared that business partner wanted to borrow money to buy a property.

When my friend knew his intention, he refused the request immediately. My friend said, he will lend money to someone for medical treatment. Nevertheless, he is reluctant to lend money to someone for real estate investment purpose. He stressed, if he lends money to someone to invest in property, why not he invests by himself. Most of the borrowers for medical treatment will repay their debts. By contrast, investment borrowers are highly possible that they will not pay back their loans.

In early days, most of the borrowers were moderate and would not get angry even if they were rejected. However, his recent experience has made him deeply disturbed. The poor who borrowed money from friends by using a coercive attitude, and those who refused to lend money were immediately rebuked.

My friend was unhappy because of this incident, but he did not reprimand his business partner directly. Today, money is not coming easily. If it is necessary to lend, the lender should prepare that there is a chance that he cannot get back his money. If one feels uneasy about this kind of matter, try not to lend.

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The figure was in line with the median estimate in a Bloomberg survey of economists.

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