Residential prices are likely to go on increasing unless the government introduces drastic measures to suppress demand. Whether you should enter the market is difficult to tell because buying a home is a long-term decision and depends on your own needs. If you have that budget, Wan Chai should be a top choice as the area enjoys greater upside potential. Flats in the area can fetch monthly rents of HK$40 to HK$50 per square foot, compared with HK$20 to HK$30 in Sai Wan Ho.
Job security and whether it is easy to find a tenant for the existing flat are two major considerations for the move. It is worth drawing up a risk assessment, such as whether not having any income for a year or rental income from the existing flats for six months will cause any financial problems for you. You also need to go through a stress test by banks before you can secure a mortgage for the second flat. At present, there are no fundamental reasons for a sharp decline in property prices. In this case, risk management is the more important consideration.