The lead article in this morning's Property Post painted a bearish picture for the future direction of Hong Kong property prices with increased supply (up about 10% this year from last year) and reduced demand from mainland immigrants and investors pointing to a further decline. One of the analysts was quoted as saying that prices could fall by around 15%.
While a further decline is expected, and 15% does not sound an unreasonable guess, it is still a guess. I have no idea either where bottom of the cycle valuations will end up or how long it will take us to get there. Historically people have under estimated the size of the decline during the early stages of the downturn and gone to the other extreme and forecast something of an economic apocalypse near the bottom of the decline.
For my part, I intend to hold my current properties through the cycle (its been a long time since I purchased a property) and will consider adding to the portfolio if prices drop to the point where yields become attractive again. If this happens before I retire, I will take out the biggest mortgage I can get to fund a purchase. If not, then the fact that I will not have employment based income may make it hard to get a loan.