Falling to cash out at the peak leaves you with nothing

As the new year approaches, the property market has calmed down after going through a period of unstable development stage. However, the market trend of small and medium-sized residential properties is currently consolidating at the bottom before finding a breakthrough point. In the past few years, many investors have missed a rare opportunity to profit by not seizing the chance to sell at the peak. In retrospect, we must heed the lessons of the past.  

Wai-Hung, a typical hardworking middle-class, often commuted to Shenzhen for work in the last twenty years. Thus, he personally saw the country's economic boom. A decade ago, Shenzhen's property market was on the way to rise; he invested approximately two million Renminbi in a residential unit in the Futian District. By 2021, his unit's market value had increased to six million. Although his investment property doubled in value, Wai-Hung believed his unit still had room to rise further and was in no hurry to sell. 

Early 2023, Shenzhen lifted its lockdown due to the end of the pandemic, and the local property market was expected to take off again. Wai-hung believed his property's value could increase to ten million Renminbi, so he continued to hold on his unit. However, things did not turn out the way he wanted. Local property prices plummeted, and his property's value had fallen to just about two million dollars. Now, deciding whether to sell or keep it has become a real dilemma for him.  

Wai-hung's situation was not the worst. He missed an opportunity to make a substantial profit, but he didn't fall into a deep crisis. In recent years, many Hong Kong billionaires, who have been living a rich and fulfilling life, made a big misstate in their old age that made the situation irreversible. They did not sell their investment properties at a high price. On the contrary, they all used high leverage to remortgage their properties and buy commercial properties worth billion or even ten billion of Hong Kong dollar. Unfortunately, the market value of these commercial properties has dropped by 50% to 70% in the past few years. As a result, the plunging prices had wiped out many investors' equity. Until now, two billionaires were even declared bankrupt by creditors. Those unfortunate events ended the legendary stories of getting rich through property speculation.