Soaring home prices in Tuen Mun can provide a fat target for the pin that pricks Hong Kong's property bubble.
Not on any tourist map and unlikely to ever be visited by members of the local elite, the district - located on the western fringe of the territory - has come to signify everything that's wrong with the local real estate sector.
The developer in danger of being fingered as a main culprit in an impending disaster is Sun Hung Kai Properties (0016).
It recently started marketing the Century Gateway residential project in Tuen Mun, ending a six-year drought of new private housing schemes in the district.
Initially, it was a project that delighted local residents. But the welcoming mat was quickly withdrawn when SHKP priced the flats at up to HK$13,000 per square foot - similar to what prices had been in Mid-Levels a few years back.
Say "Century Gateway" to someone and you are likely to be answered with the standard follow-on line "Prices are crazy."
That doesn't ring at all well with Victor Lui Ting, the SHKP executive director who is marketing the project. He is urging property agents to make a beeline to the scheme and to entice prospective buyers.
He has also arranged promotional roadshows for the project in Sheung Shui, Kwai Fong and Sha Tin - like Tuen Mun all districts in the New Territories. They have drawn "big crowds," Lui claims.
Property agents working on Century Gateway say they have been run off their feet. But a visit to the site by a team from Eastweek, a sister publication of The Standard, found most agents were not doing much of anything. Some were talking to each other, though.
Spiels from property agents
For Ms Lee, a HK$10,000 per square foot price tag for an unit in Tuen Mun - let alone HK$13,000 psf - would be unreasonable. "Even at HK$7,000 psf it would be expensive for me," she says, and despite the fact prices are still surging she fears a slump.
So "I have to buy in another district," Ms Lee says, and anyway "infrastructure in Tuen Mun is inadequate."
Another person hunting for a new place to live, Mrs Chan, did not respond at all well to spiels from property agents.
She has been looking for an apartment for almost one month, but so far everything she has seen is way over her budget.
"A three-bedroom home in Tuen Mun Town Plaza costs as much as HK$3 million. That's a very far cry from what I can afford."
And to hear soaring home prices quoted is hardly music to the ears of current Tuen Mun residents.
Mr Chong, who lives in Tuen Mun Town Plaza, bought his 523-sq-ft flat for HK$1.46 million in 2009. Such a flat now costs HK$2.46 million.
Mr Chong claims he's not surprised by the HK$1-million price appreciation in just three years. He is concerned, however, by the fact that if he sold his flat he could not afford to move up in Tuen Mun.
"Originally I wanted to sell this flat for a bigger one within the district," he says. "But there is little hope of that happening when asking prices for Tuen Mun Centre are HK$4,800 psf. And Tuen Mun Town Plaza units are going for HK$5,300 psf."
Interestingly, Tuen Mun Town Plaza is just one street from Century Gateway but its units cost half as much.
As for secondary home prices in the district, they have long lagged behind the general market. Even when home prices were rising in recent years on Hong Kong Island and in Kowloon, Tuen Mun remained a backwater.
But Century Gateway has done much to reverse that trend. Prices of old flats near the project have also risen.
Flats at nearby Trend Plaza, for example, climbed 15 percent in April from March to HK$4,900 psf. That was above the peak hit in 1997 - the last time Hong Kong's property bubble burst and put thousands of homeowners in negative equity.
Ming Tse, a director of Many Wells Property, thinks Century Gateway commands a steep price because it was the first new project in Tuen Mun since The Sherwood - launched by Henderson Land (0012) six years back.
"It's normal for homeowners in Tuen Mun to raise asking prices or even delay the sale when Century Gateway is asking for astronomical figures," Tse says.
About 804 flats worth around HK$1.63 billion in all were sold in Tuen Mun in March by a Ricacorp count. Compare that with 152 transactions worth HK$360 million in December.
So when even a relative backwater like Tuen Mun wriggles in the grip of high property prices, experts warn, the future is likely to be bleak. Home prices are viewed by many like stock prices. In a bull market, blue chips and other big caps first enjoy the upturn. Then shares of mid-size enterprises go up, and at the end of the boom you see penny stocks rise.
"Flats in Tuen Mun are the property equivalent of penny stocks," a market follower comments.
Besides Tuen Mun, property prices in other several districts of the New Territories - Tai Po and Fan Ling among them - have soared past their 1997 peak levels.
Mr Lau, in his twenties, had planned to buy a flat in Tai Po Centre. "The owner was asking for HK$1.8 million only a year ago," he says, his face tightening as he recalls the price. "But now the price has risen by more than 20 percent to HK$2.2 million.
"It's very difficult to even save enough for a downpayment. How can we afford the mortgage?"
The average price in the Tai Po area is in fact HK$5,113 psf. It was HK$5,042 in 1997.
"Most people's wages have not risen that much compared with 1997," Lau goes on, saying he thinks the situation being generated in the property sector "is so dangerous."
Ms Au Yeung, who bought a flat in Tai Po Centre for HK$1.4 million five years ago, was recently offered HK$2 million for the place. But she is not tempted to sell.
"Okay, I will make some money if I sell," she says, "but then what can I buy? Will I need to sleep on the street?"
Those who are willing to pay HK$10,000 psf for a Tuen Mun home could check what happened at Kingswood Villas in Tin Shui Wai, also nearby in the New Territories.
Herald of big trouble
Flats at the property, located two rail stations from Century Gateway, were selling at an average HK$4,800 psf in 1997. Now, after 15 years, Kingswood flats fetch an average HK$3,400 psf.
Ms Wong, who bought a Kingswood flat in 1998, has given up any hope of its price rebounding. And if Century Gateway sells less well than expected, she adds, "prices in Tin Shui Wai could take a severe hit."
It's left many people, including some business-seasoned citizens, simply stumped about what to do.
"The private home market bubble is set to burst," says retiree Ms Leung, "so it's not a time to buy. But inflation is eating up my purchasing power if I keep cash in the bank that earns little interest while rents are rising higher and higher."
Academics reckon that Tuen Mun flat prices could indeed be the herald of big trouble for the property sector.
Says Raymond So Wai-man, dean of business at Hang Seng Management College: "It's horrific. Prices are detached from real purchasing power.
"If flats in Tuen Mun are worth HK$10,000 psf, then perhaps homes in Sha Tin should go for HK$12,000 psf or even HK$13,000 psf."
Eddie Hui Chi-man of Hong Kong Polytechnic University's department of building and real estate says he's stunned. "It's really crazy. Tuen Mun homes are demanding about the same prices as units in urban areas."
An investor who speculated in the local property market notes: "In the past, Tuen Mun property prices didn't catch up with the general market for a reason: if purchasing power lags price hikes the market is likely to face a slump."
So let's get back to basics - "fundamentals" if you prefer it.
The supply of new homes will start rising from next year. According to people in the Rating and Valuation Department, 15,000 units will be completed next year. That will be up 50 percent on the average number of new flats built over the past five years.
Some experts says home supply could double in 2014 from 2013 and then again in 2015 due to a government policy taken a few years back to ensure an annual supply of 20,000 new private flats for the next 10 years.
Also, the incoming administration of Leung Chun-ying is expected to revive the government's home-ownership scheme by building 5,000 units immediately.
During his election campaign, Leung pledged to help more people of limited means buy their own homes.
Then there are interest rates, which since 2009 have stayed at historic low levels as the US Federal Reserve has tried to revive the world's largest economy.
But experts point out that interest rates will not stay low. In fact, they may rise within this year and thereby raise the mortgage burden for homeowners.
Narayana Kocherlakota, president of the Minneapolis Fed, said this week that the rates should go up by the end of the year.
"The increase in inflation and decline in unemployment over the past year point to the need for tightening," Reuters quoted Kocherlakota as saying.
In Hong Kong, meanwhile, the mortgage affordability ratio - the average monthly home loan payment as a percentage of household income - is close to 50 percent. That is the maximum allowed by the Hong Kong Monetary Authority.
And even though that's a long way from the 90 percent as recorded in 1997, the ratio is likely to rise further when rates go up, thereby threatening the property market.
"The home market is in a bubble," Raymond So. "I can't imagine what it will be like when banks reverse their low-rate policy and homeowners have to pay much more than now."