Opinion & Strategies

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What do margin trading have in common with property financing?

Leveraged positions which can increase returns or losses.

Here's a simple example on leveraging:

Property financing and margin trading 20220622

Notes & Assumptions:

Capital Gain of 6% and 3% as an example.

Share financing/ margin trading:

Excludes dividend income, brokerage cost.
Applicable to shares only on Marginable Securities List.

Mortgage/ property:

Excludes rental income, agency fees, taxes, stamp duties, legal fees, MCST fees, etc.
Reference to Residential property, where TDSR, MSR, LTV and tenure apply accordingly.
Applies to resale. New launch projects have progressive payment scheme which monthly payments is lower on the average for the first 3 years or before TOP as payment amount corresponds to the construction stages of the project.
Type of mortgage package, like consistent rate vs low initial rate higher thereafter rate, will also impact returns.

Different asset class presents different risk and returns. The volatility of physical real estate is lower relative to stocks. Home prices have an upward trend in the long run and also have opportunities for capital appreciation, whether it is for own-stay or investment. For investment properties, rentals can provide an additional stream of income.