Bloomberg reports Hong Kong’s Fifth-Tallest Tower Sells for Record $5.15 Billion . A Chinese-led group bought the 73-story building, in a red-hot Hong Kong property market.
Red Hot Deals
Simple Question
I have a simple question, one the article never addresses.
What the hell do the buyers know that the sellers don’t?
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I have one of my own that fits the picture.
Nonsensical Global Worries Over Subdued Inflation: Yellen, Draghi, Kurodahttps://t.co/RmGNQ9cMm9 pic.twitter.com/E4iNec1eKq
— Mike “Mish” Shedlock (@MishGEA) October 16, 2017
For details please see Nonsensical Global Worries Over Subdued Inflation: Yellen, Draghi, Kuroda .
Mike “Mish” Shedlock
Many large buildings changed hands in my area during the 24 months prior to the 2008 crash. Higher loan-to-value ratios, interest only loans, and other favorable terms increased purchasing power and transformed owners into sellers. I imagine some sellers traded up.
Honk Kong is arguably a freak show due to its special status wrt China. Some Chinese are supposedly still overpaying in local currency for Bitcoin, just to get money out of the country. Buying overpriced towers in Hong Kong, may be another way of accomplishing something similar.
Of course, none of that means those kinds of prices are any more than plain silliness, brought about by simple confiscatory money printing. At the 20USD/ounce price for gold that were the norm back in the civilized era, this one fairly mediocre tower would have sold for about 5% of all the money in the world…… Which nicely illustrates why those bent on robbing others by debasement, prefer purchasing power to be represented by something they, and only they, can print up arbitrarily and cheaply to make themselves richer without expending effort doing anything useful. Rather than something everyone has an equal opportunity to dig up and/or manufacture.
“What the hell do the buyers know that the sellers don’t?”
An interesting rhetorical question. If I had $10 billion, I might spend half of it for a Hong Kong tower for the sake of diversity. If I owned several towers in Hong Kong, then I might sell one in order to diversify into gold and other investments. May have nothing to do with absolute values, if there is such a thing. Hong Kong real estate might be safer than Manhattan real estate. I mean if the Neo-cons, McCain and the Democrats manage to drag the USA into a war with Russia, 9-11 will seem like a border skirmish and Hong Kong will be the better place to be.