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Aggressive investors queue up to go bankrupt
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Aggressive investors queue up to go bankrupt
Damon Ho
2023年12月2日
As time goes by, the Christmas Eve is coming to the town. Earlier of this year, the property market rebounded slightly in the first quarter, but from the second quarter, the property market experienced a lengthy period of decline. In fact, during this downturn, the deep fall of shops and commercial properties is much more serious than that of residential premises.
Given that most of the buyers of  shops and commercial properties are investors, and many of them have been entering the market through highly leveraged borrowing. Since the federal reserve's hike rates policy was implemented, investors are under pressure to repay their loans in a high-interest environment during this period.
For investors, the repayment of hike rates is only part of their nightmare, and the issue of the banks' all-out call loan action will cause a heavier burden to shops and commercial property borrowers with a pile of negative equities. In order to safeguard their financial safety, banks will not hesitate to request owners to pay the valuation differences if the properties have become negative assets.
In the past, some investors continued to purchase properties by remortgaging, or even borrowed short-term loans at a 10% higher rate to finance their short-term payments. However, the economic environment has been deteriorating, resulting in the shops' prices dropping of more than 50% per square foot, and commercial properties' prices were less than 40% in general. One month long ago, one investor sold a shop with a market value of one hundred million HK dollar, which valued three hundred million HK dollar three years ago. Despite this situation, the banks do not hesitate, so they havebeen speeding up their call loans action.
The year 2024 is coming, the investment markets are still sluggish, and it seems to have no chance to recover for the time being. Many investors will default on their shops and commercial properties' mortgage payments, and it is not surprising that investors will queue up to go bankrupt from the second half of the year.
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Aggressive investors queue up to go bankrupt
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