Subprime has now become a familiar word to us all. Financial corporations that should have known a crisis was looming seem to have had their judgment clouded by the hollow prize of profiting from the lending of easy money. Many economists warned of the fallout from bad loans that had to be written off. Some harsh lessons are now being learned in Europe and the United States about how the release of equity helped feed house-price inflation. In those parts of the world, it is no longer a question of whether property prices tumble, but when.
How refreshing then that in Hong Kong we find ourselves relatively unscathed by the mortgage malaise that has afflicted other property markets. Industry watchers are reporting strong demand in the residential and commercial sectors, with encouraging signs that property is still a vital part of a diverse and high-performing investment portfolio.
There is a strong sense of confidence out there, with rising rents and prices as multinationals seek high-end accommodation for their executives. In the mid-market, there is more caution, with agents less bullish about the prospect of rising prices. But with interest rates in Hong Kong relatively low compared with other economies, home ownership is a viable option for more people.
Getting the money and mortgage calculations right is crucial to sound investment, but property purchases should also be fun, particularly when building and designing a home to be proud of. We found this when we met people who took the plunge and restored small, ageing flats to create modern, stylish living spaces.
Make no mistake, it can be agonising. But when a plan works out, the sense of satisfaction can be immense. Such a pity that the same can't be said of those whose dreams were built on subprime.