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Holding premises better than holding dividend stocks
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Holding premises better than holding dividend stocks
Damon Ho
2023年2月18日
When an ordinary middle class is approaching to middle age, one should start to pave the way for retirement in the future. Unlike some western welfare countries, Hong Kong workers have relatively incomplete welfare protection. Therefore, the retirement plan for the middle class must be planned as early as possible, so as not to retire with empty-handed when they are old. Otherwise, they will eventually fall into the grassroots class and wait for the government's welfare relief to support.
During the pandemic, the prevention and control policies have caused the economic downturn, and the business environment is being hurt seriously. Under the negative effects of various unfavorable factors, the property price per square foot has also fallen by about 14%, which it caused the pessimistic sentiment further widespread. Property prices fell, but rents remained stable. Property prices began to stabilize when the property rental returns rose to 3% approx.
The Hong Kong middle classes who choose to stay should try their best to hold  a self-used properties for retirement even if they are pessimistic to the economic outlook. In the past two years, those investors who underpin bearish view on property and bullish on the dividend stocks have already suffered great losses.
Until now, investors have begun to understand that stock dividends are extremely unstable. HSBC could suddenly stop paying dividends, Towngas suddenly stopped paying bonus shares, and high dividend infrastructure stocks would cut dividends massively. The prices of dividend stocks like the Link Real Estate Investment Trust can immediately plummeted by about 15% after announcing the unexpected fundraising right issues five for one. After this drop, the dividend income of this stock in the past four years was instantly evaporated.
In the past two years, the price of small and medium-sized residential properties has fallen either, but the rent adjustment is less than 5%. Obviously, the rents’ adjustment range is much smaller than the property prices. Therefore, the yield return of holding residential properties is more stable than holding dividend shares.
If you only hold one residential property, you can rent out the property for living expenses after retirement, and then move to the Greater Bay Area to live, or you can consider applying reverse mortgage to make capital arrangement for your retirement life. No matter how you retire, holding at least one residential property can provide security for your future retirement life.
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Holding premises better than holding dividend stocks
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1.
60000 exited the city last year |
| 2023-02-18 21:01 |
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The population in Hong Kong fell to 7.33 million last year - a drop of 68,000 people, or 0.9 percent, from that in 2021. And 60,000 of those left the city for good, according to the Census and Statistics Department. Although the population slightly rebounded from 7.29 million in mid-2022, Hong Kong still recorded a decrease of 68,300 people from the 7.4 million at the end of 2021. The drop between 2021 and last year comprised of a natural decrease due to deaths surpassing births and an outflow of residents, the department said. Hong Kong recorded 32,500 births and 62,100 deaths, causing a natural decrease of 29,500, the department said, adding that the gap between deaths and births widened last year.
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2.
Investors suggest to reduce stamp duties |
| 2023-02-20 09:54 |
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Over 70 percent of retail investors suggested reducing or removing stamp duties on stock transactions ahead of the budget announcement, while 42 percent hoped to extend the trading hours of the Hong Kong market to 24 hours, Bright Smart Securities & Commodities (1428) found. These results were reached after the local broker interviewed 3,000 retail investors in the first two months of this year. This came as the stamp duty on stock trades was hiked to 0.13 percent from 0.1 percent since August 2021.
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3.
Composite rate rose to 2.11% |
| 2023-02-21 10:21 |
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The composite interest rate rose to 2.17% at the end of January from December 2022’s 2.11%, according to the Hong Kong Monetary Authority. The rise is due to the increased weighted funding costs for deposits during the last month. Meanwhile, the Monetary Authority recorded a 3-month Hong Kong Interbank Offered Rate (HIBOR) of 3.67%
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4.
Budget needs to provide incentives |
| 2023-02-21 12:06 |
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Hong Kong Financial Secretary Paul Chan faces a tough task this week as he unveils a budget that needs to provide incentives to revive the city’s international image while preventing the fiscal deficit from spiraling out of control. Economists largely expect Chan to focus his budget address Wednesday on what the city will do to attract more foreign talent after years of strict pandemic curbs battered its status as the region’s premiere financial hub. Chief Executive John Lee made reversing an exodus of expats one of his top priorities during his maiden policy address last fall. Ten of 11 economists surveyed by Bloomberg this month said the government would roll out measures to bring in that talent. Seven of 10 respondents said they expected more incentives — including possible salary tax exemptions — to be announced to alleviate the financial burden faced by businesses and individuals.
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5.
Grade A Office recorded negative absorption |
| 2023-02-22 10:20 |
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The Grade A office market recorded a negative absorption of 16,900 square feet in January, JLL reported. The January performance is linked to the Chinese New Year, which is considered as a low season for the office leasing market. The overall vacancy rate went up to 12.2% by the end of January. It rose marginally in Central and Wanchai/Causeway Bay to 8.9% and 10.3%, respectively; but inched down to 11% in Hong Kong East from 11.1%.
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6.
Strong GDP growth 3.5% to 5.5% |
| 2023-02-23 10:44 |
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Hong Kong’s strong GDP growth prediction of 3.5% to 5.5% for 2023 will increase the real estate demand across the city’s property sectors, according to CBRE Hong Kong, as they welcomed the 2023-2024 Budget. The real estate and investment firm’s Head of Research, Marcos Chan, said that after Finance Secretary Paul Chan declared that Hong Kong would see a “visible rebound” this year, they expect a noticeable recovery in the city’s leasing and sales activity. He added that the 3.0%-3.7% GDP growth forecast between 2024 to 2027 suggests a “long-lasting” recovery and will pave a sustainable demand for commercial estates in the next three to four years.
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7.
Budget 23 to24 highlight |
| 2023-02-24 12:14 |
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The government has unveiled multiple measures under the 2023 to24 budget that will support the operations of businesses in the city. Amongst the measures proposed by Financial Secretary (FS) Paul Chan was the reduction of profits tax for the year of assessment 2022-23 by 100%. The reduction is subject to a ceiling of $6,000. Chan said that whilst profits tax reduction will reduce government revenue by $720m, it will benefit 134,000 businesses.
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