What a difference 16 months makes.
It was in February of 2016 when, looking at the latest trends in the Hong Kong housing market, we wrote that in January  Hong Kong home prices tumbled the most since July 2013, and after a 12 year upcycle, prices were now down 10% from the recent peak just four months prior...
... while the local Centaline Property Agency estimated that total Hong Kong property transactions at the start of 2016 were on track to register the worst month on record.
Fast forward to today when that particular blip is long forgotten, swept away by the record credit injection unleashed by China in the interim, which has spilled over into the Hong Kong's housing market where instead of concerns about a bubble bursting, the locals are preoccupied with chasing the latest, and biggest yet, housing bubble to form in Hong Kong, as crowds of people line up in hope of being the winning bidder for one of several properties for sales, some of which are oversubscribed as much as 15x.
Another HK new home sales oversubsribed 14.8x today, not as hot as ystdy 'cos >HKD18k/sq ft. Only hundreds buyers. pic.twitter.com/WrraPLudEk— Simon Ting (@simonting) May 27, 2017
According to the latest data from Hong Kong's Centaline Property Centa-City Leading Index of existing homes, prices have risen an unprecedented 23% in the past year, setting new price records week after week. Over the past decade, home prices in the financial capital of Asia have tripled.
As Bloomberg observes, snaking queues of thousands of prospective apartment buyers in Hong Kong signaled authorities have made no progress in cooling a red-hot property market, where prices are at records.
A HK new home sale site queues with over thousand of buyers.— Simon Ting (@simonting) May 26, 2017
Last time this happened in 1997. pic.twitter.com/DHtH897ga9
At the Victoria Skye, a luxury project at the former airport site of Kai Tak and at the Ocean Pride development by Cheung Kong Property Holdings people were lining up on Friday and over the weekend for their chance to buy a home at all time high prices.
K&K Property has offered an additional 200 units at Victoria Skye after it sold 306 flats on Saturday, Ming Pao newspaper reported. Cheung Kong will put another 346 up for grabs after selling 496 in a single day, May 26, it said. In both cases, the developers will raise the prices of the additional units by about 2 percent, the newspaper reported.
Yes, HK real estate prices are rising by 2% not over a year, or a month, but in one day!
That, however, does not stop the relentless demand from local buyers. Hong Kong developers sold 8,616 homes in the first five months of the year, more than were sold in any first half since new purchasing rules were introduced in 2013, the Hong Kong Economic Times reported.
What makes this particular bubble different is that this time, it is obvious to everyone, certainly the local press. An editorial in The Standard newspaper on Monday was surprisingly accurate: “successive moves by the government in recent memory to cool the property market only resulted in it becoming crazier. The result is a sea of madness.”
It is also obvious to the local central bank, which, however, like Vancouver and Toronto, appears powerless to halt the tsunami of hot mainland money. The Hong Kong Monetary Authority has been tightening rules for lenders, Bloomberg writes, including restricting levels of lending to developers, as it tries to limit financial risks and take some of the heat out of the market.
And yet, so far the result is absolutely nothing as nobody bothers to listen to the growing warnings.
Speaking at a Legislative Council meeting last Monday, Hong Kong's central bank chief, HKMA Chief Executive Norman Chan, said levels of demand were reminiscent of 20 years ago, just before Hong Kong suffered a property bust, and he expressed concern that people with limited financial resources were buying just because they thought prices would only keep going up, just like in a bubble.
Chan said that while the global economy has improved, uncertainties remain and warned that when the property cycle reverses, "the impact will be serious."
With real estate prices rising fast - in some cases as much as 2% per day - his warning has fallen on deaf ears. Of course, it will be different when the bubble against bursts, and everyone is "shocked" that the authorities let it come to this again, and then first the HKMA, then the PBOC, will have to again step in and bail out all the bubble chasing speculators once more, or risk yet another economic collapse, rinse and repeat.