The leasing and sales transactions of shops have been increasing lately. It is because investors are forced to sell their long-term holding shops at ultra-low prices due to the callable loan from banks. Since these shops are needed to be sold as soon as possible to cover the difference between debit and credit, so the landlord had no choice to sell them at lower prices. As a result, the transaction price had plummeted to record low and raised the yield to 7 to 8%. 

Lately, the investors sold their shops at ultra-low prices which was the best self-help method for debt-ridden landlords. For new investors who bought these price-cutting premises, the yield return of 7% more is really incredibly attractive. In fact, the yield return of shops remained between 1 to 2% in the past twenty years. Until recently, it has been bouncing up more than three times, and this market sentiment is very favorable to long-term investors.

Some landlords will forge leasing contacts to create the illusion of high yield; buyers must carefully inspect these contracts so as not to be cheated. However, the recent transactions showed that the prices have been falling, and this is the reason the yield return has risen significantly. 

Recently, the first floor of Cammer Commercial building on Cameron Road in Tsim Sha Tsui sold at HK$27.5 million, representing HK$6,381 per square foot, monthly rental at HK$177,000, and the yield rose to 7.7%. With such a high yield, investors buy the dip which is a rational investment. Even if the economy deteriorates in the future, the monthly rental of this property will be cut in half to HK$88,500. The yield of the new contract will still be kept at 3.9%. The worst situation has no tenants at all, even the rent being cut by half. Therefore, as rational investors, they should purchase any premises with low leverage to deal with the worst situation. 

On the other hand, the average yield of residential properties is about 3.5%, which is estimated to rise to 4% by the end of this year, and the yield in 2026 will rise by another 1% to 5%. In terms of investment returns, residential properties are still not worth long-term investment before the end of next year.