HK Real Estate Bubble?

Many will refer to the CCI (Centa-City Index) provided by Centraline Property http://www.centadata.com/cci/cci_e.htm to assess what cycle time it is for the HK real estate market. Here's the latest chart as of Dec 30, 2010. Overall index is at 87.5, drop 0.9% vs. last week and last month. (Note: 100 = 1997 level).

Clearly, the several recent government policies have halted the rapid upsurge of HK real estate in 2010, driven by hot money rushed in from China and overseas. Whether the 1997 level is the ultimate ceiling or a "new high" will be achieved, that's a million dollar question.

But with cap rate only 2%-4% and such a high risk of downside, I will stay on the sideline until later. HK real estate market is good for speculative short term investors. For long-term buy and hold, i would rather wait for the next cycle.



Another version from commentary in Chinese: