Looking back at 2021, it was a year of the intersection of anxiety and opportunity for many property owners. The property prices reached historic high, yet property transaction volume remained active. Ah Wei decided to sell his primary residence. After the sale, he felt a sense of pride in his "successful escape" by looking at the substantial sum in his account.
Ah Wei's thinking was simple. He cashed out at the peak and moved to Toronto to find a larger living space and better investment opportunities.
Upon arriving in Toronto at the end of 2021, Ah Wei began closely watching the local property market. Early in 2022, the Toronto 
housing market was frenzied, with bidding wars becoming common. To settle down, Ah Wei used the proceeds from the sale of his Hong Kong property to buy a high-quality high-rise apartment near a Toronto downtown subway station.
Ah Wei strongly believed Toronto's population inflow was strong, and the real estate market was expected to rise in the long term. However, the reality was no mercy to Ah Wei. The global interest rate hikes changed the game. Canadian mortgage rates soared from just over 1% to 4%, directly suppressing buying power and causing a sharp decline in property prices.
A recent bank valuation and nearby transactions showed that the unit Ah Wei bought four years ago had now lost half of its value. This is not just a paper loss; it is a compounding disaster and a tough test of his investment skills.
In 2021, Ah Wei seized the opportunity to sell his unit at a high price, but he overlooked a crucial point. It is unwise to jump out of the frying pan and into the fire by chasing another overheated market right after taking profits.
If Ah Wei had invested the proceeds in Hong Kong or US stocks after selling the property in 2021, the returns would be double easily. Even if he had simply kept the money on a fixed deposit, he could have preserved his capital. If he had done so, Ah Wei would be much happier today.
