Updates On HK Property Market

Despite concerns over a property bubble in Hong Kong and government efforts to cool the red-hot sector, two Hong Kong tycoons: Cheung Kong Holding’s Li Ka-Shing and Henderson Land’s Lee Shau kee have been snapping up shares in their own firms.

Robert Halili, Managing Director at Asia Insider told CNBC on Wednesday, this insider buying is encouraging news for shareholders and investors looking to bet on the real estate sector.

“The one thing I want to point out to investors is that whenever these 2 titans buy at the same time, it is almost like a solar eclipse. It only happens once in a blue moon.”

Out of the $2.6 billion dollars invested in property-related stocks over the last 10 weeks, according to Halili, Lee Shau-kee’s purchase of 39 million shares in Henderson Land accounted for $2 billion or 76 percent of the total amount.

“Prior to this year, the chairman [of Henderson Land] acquired an average of 8.5 million shares worth $309 million per year from 1993 to 2010,” he added.

So, who do you believe, the property tycoons or the more rational government officials and analysts???

Protestors are on the streets all around the world these days. In Europe people are angered by harsh austerity measures, in the Middle East they are trying to topple failed governments and on the mainland protests are invariably sparked by some form of brutality — driving over a protestor in Mongolia or pushing around a pregnant street vendor in Guangzhou. The world’s masses seem to be taking to the streets.

Except in Hong Kong, where life goes on in its disconnected-from-the-woes-of-the-rest-of-the-globe bubble, which is of course encapsulated in another bubble: the housing one. Property prices remain outlandishly high, despite signs around the world that the economic outlook isn’t exactly rosy.

The reasons are myriad, yet simple. The masses are provided with subsidised public housing. The next layer, the middle class, owns housing that is then rented out, often to foreigners whose companies enable them to discount the rent from their taxes, providing enough of a subsidy to let them rent a small flat with a maid’s room for the same price they would pay back home for a McMansion with a garden, pool and two-car garage in the suburbs of a major metropolitan area. Their landlord doesn’t need to work, but rather lives off the rental income. Then there’s the next layer — housing owned by wealthier Hong Kong families or corporations that is rented to companies that pay outlandish rents for their senior expat staff. The company writes it off as a business cost and the Hong Kong family or business laughs all the way to the bank.

The Hong Kong Monetary Authority (HKMA) has tried to keep the genie in the bottle through policy measures. On June 10, Norman Chan, the chief executive of the HKMA, announced the latest tightening measures: with immediate effect, a 50% down payment will be needed for transactions of more than HK$10 million ($1.3 million), from the previous limit of HK$12 million. Down payments of 40% are needed for homes costing between HK$7million and HK$10 million (previously the band was between HK$8 million and HK$12 million) and subject to a maximum mortgage cap of HK$5 million. A 30% down payment is still applicable for homes below HK$7 million (previously HK$8 million). The HKMA also imposed a new rule, lifting the down payment requirement by 10% for mortgage applications with principal income sourced outside Hong Kong, but of course if this is targeted at mainland buyers (more on them later) it’s meaningless, as most don’t borrow from Hong Kong banks anyway. As a result, analysts have generally viewed such tightening measures as having a limited effect.

Rating agencies such as Standard & Poor’s forecast a stable outlook for Hong Kong’s property market, though sensibly warn that the market is vulnerable to external shocks. S&P notes that the credit profiles of rated developers have a reasonable buffer thanks to that recurring rental income from a diverse population.

But it cautions about the possibility of a “sharp correction in prices”, noting in a June 14 report that “affordability has deteriorated because of high prices and could weaken further if interest rates rise from their current low levels”. The rating agency further points out that “strong liquidity could reverse because capital flows are fickle. Hong Kong is susceptible to external shocks, due to its open economy and free capital movement”.

External shocks to watch out for include “a sharp rise in interest rates, a hard landing in China’s economy, and a significant adjustment in equity markets", Christopher Lee, director corporate ratings for S&P, said in an interview.

The China connection
The recent financial crisis underscored one of the most important buyers in the Hong Kong market of late: mainland Chinese. During the crisis, Chinese investors flooded to Hong Kong, snapping up property, particularly in the high-end residential sector. And the influx continues.

According to Centaline, 24.9% of all primary transactions were by mainland buyers in the first four months of 2011, up from 24.1% in the second half of 2010. They are most active in the high-end property market, making up 38.1% of buyers in the primary market and 22% in the secondary market for transactions above HK$12 million, an increase from 33.8% and 20.8% in the second half of 2010, respectively.

That’s good for Hong Kong developers, but bad for renters or other potential buyers, who have stood on the sideline watching prices skyrocket. But a shock to China’s economic and credit conditions could trigger a correction in the high-end property market, which would then have a knock-on effect in mass-market prices, notes S&P. That shock might already be in the works. In the same report, S&P downgraded China property, pointing out worsening borrowing conditions.

If the mainland market cools and oversupply ensues, cash-strapped developers could fall into a price war to attract customers, who might then reconsider buying back home rather than in Hong Kong.

For our readers, many of whom have tried to play the Hong Kong property market by buying property here in the hopes of flipping it before leaving, it’s possible you’re sitting on — or nearing — the peak of this cycle.

“We believe the various measures that have been put up have brought a cooling effect to the secondary market, and thus transaction volume will stay low given a reduction in both supply and demand, continuing policy risks and concerns about potential asset bubbles,” explained Ken Yeung, Citi’s Hong Kong real estate analyst.

“Prices that are supported by thin transaction volumes may not be sustainable,” added S&P’s Lee.

Of course, it depends on what you own — and are trying to sell. Colliers International reasons that supply-demand imbalances and inflationary pressure continue to drive rents upwards. The average luxury rent increased 3.62% quarter-on-quarter in the first quarter of 2011 to HK$45.42 per sq ft per month, only 0.7% below the previous peak in mid-2008.

“In spite of the market consolidation in terms of sales volume during the short-to-medium run, the sustained low-interest-rate environment, rising inflation and tight luxury residential supply will drive the price growth for luxury residential further. Luxury residential property prices are forecast to grow 6% in the next 12 months,” Colliers forecast in a recent property report.

Some property specialists (particularly those who aren’t employed by companies trying to sell you property) note that the so-called supply shortage in Hong Kong is a myth. By some estimates there are as many as 200,000 empty flats in the city — certainly not a shortage that warrants price hikes. So why the high prices? Landlords are willing to sit on empty (unrented) supply.

“Prices have been sustained by the flood of liquidity and currently very low interest rates,” said Lee. “There may not be a shortage of apartments, but landlords are not renting them at below market rates. Therefore, prices are sustained by expectations of prices remaining high or continuing to grow.”

In other words, market fundamentals be damned. Given the eternal optimism of Hong Kong developers and sellers, trying to time the market is even more difficult in Hong Kong than anywhere else, and in the best of situations it is as safe a game as juggling lit firecrackers. The high could be this week, or a year from now, or five years from now. But given the global skittishness, it’s perhaps time to take a look at how much you’ve made from a property investment, and question if it’s good enough.

Bears Are Prowling

On June 10, the government announced the launch of eight sites for sale, on which it expects developers to build 6,000 flats. The move coincided with an order from the Hong Kong Monetary Authority that banks should lend no more than 50 per cent on homes valued at above HK$10 million (US$1.3 million) (down from a cap of 60 per cent).

The authority for the first time also added tougher restrictions on non-resident borrowers. Momentum is also building for the government to revive its subsidised Home Ownership Scheme, suspended in 2002. Koh said the resumption of the scheme would shorten the cycle, bringing the correction forward into the second half of this year.

“Things have certainly taken a turn for the worse,” said Lee Wee Liat, head of regional research at Samsung Securities (Asia). The government’s willingness to resume building subsidised housing for sale, together with measures targeting foreign investment demand, showed a determination to cool the market down, he noted. “A short-term correction is now possible,”

he said.

The latest data suggest a slowing in demand. Just 21 new homes were sold over last weekend — down from the 47 homes sold over the previous weekend, according to Samsung.

Secondary transaction volumes also fell to their lowest level so far this year, with just 21 flats sold at the 10 largest residential estates tracked by Midland Realty, down from 24 the previous weekend.

Developer Cheung Kong (Holdings) has lowered asking prices at its Uptown apartment block in Yuen Long by between 5 per cent and 8 per cent, putting new average selling prices in the range of HK$5,300 (US$681) to HK$5,500 (US$706) per sq ft, noted Lee in his latest research report.

Bubble-looking For HK Luxury Condos

No matter how you cut, slice or dice the price HK$63,000 psf is a doozy. Yes, that is about $8,076 psf or RM27,400 psf. Much of the buying over the past few months have been by Chinese from the mainland. Article from The Standard.

Wednesday, October 14, 2009

Prices for luxury properties in Hong Kong are now firmly at a sky-high level, a fact confirmed yesterday as a developer slapped a price of more than HK$63,000 per square foot on a premium apartment in Mid-Levels.

That will make it the highest-priced penthouse in Asia - and it is not even on top of the building.

The top-of-the-pile tab was revealed as Henderson Land Development (0012) released the first price list for its residential project 39 Conduit Road yesterday. On it was the HK$357.7 million, 5,636-sq-ft duplex. That means a square- foot record of HK$63,473.

Another duplex, 5,131 sq ft and also on the 66th floor of the 88-story building, is listed at HK$311.4 million, or HK$60,696 psf.

In June last year, Sun Hung Kai Properties (0016) sold a 5,497-sq-ft penthouse at The Arch, atop Kowloon MTR Station for HK$41,100 psf - a record for Asia.

The pattern of soaring prices is setting off alarms as well as expressions of amazement.

Lui Hon-kwong, associate professor of marketing and international business at Lingnan University, warned of the danger of a price bubble in the property market, which is drawing huge inflows of cash from super-rich mainlanders.

"A price bubble is determined by the mainland government's policy direction," he said. "If it does not support people in investments, our property market will lose ground and prices will plunge."

Still, Eddie Hui Chi-man of Polytechnic University's department of building and real estate notes that the sale of expensive homes by Henderson is at the upper extremes of the property market and should not have a bearing on the mass market.

"Some super-rich people are chasing luxury homes like others collect paintings and wine because they are rare," Hui said.

"The property market is recovering ahead of the real economy, however, and people can afford mortgage payments."

Besides the two premium duplex homes, Henderson also set prices for 18 "regular" homes in the block - sized at 2,808 and 3,284 sq ft - from HK$73.4 million to HK$137.9 million. The developer's sales general manager, Thomas Lam Tat-man, said the company will set about securing sales as early as this afternoon.

Customers have shown interest in 20 to 30 apartments, Lam said. They are negotiating up to HK$70,000 psf for the most expensive unit.

The project has a total of 66 homes sized from 2,800 to about 7,600 sq ft, with two penthouses on the 88th floor still to be priced. Henderson has suggested it could be seeking a staggering HK$100,000 psf for the loftiest pair.

The firm intends to sell 40 percent of the homes this year, which would bring in about HK$4 billion. Lam predicts a 10 percent increase in prices for homes sold later.

Midland Realty regional sales director Jimmy Lee said the prices asked by Henderson will not deter buyers. "Housing supply in Mid-Levels is very limited and investors have long been waiting for new units."

p/s photo: Han Ye Seul

Glimmer Of Recovery In HK Property Market

HK and Singapore properties went down sharply at the beginning of the crisis. Singapore is still nursing a down trending market. However things are looking up in HK. Recent property launches have attract a lot of buyers. Of course the pricing of these new developments were a bit more attractive, and we should remember that many of the buyers were from mainland China. Developers reported vigorous weekend sales as Sun Hung Kai Properties (0016) sold 400 apartments at The Latitude while Cheung Kong (0001) said all flats at Central Park Towers II were sold on Saturday.

SHKP raised prices by 3 to 5 percent after the first batch of 50 homes at The Latitude, a San Po Kong residential project, were sold on Saturday. The average price was 2 percent higher than the original price of HK$7,255 per square foot.

The developer reaped more than HK$3 billion from flat sales at The Latitude, at an average price of HK$7,400 psf. Prices ranged between HK$5,300 and HK$15,000 psf. Flats were sold at between HK$3.6 million and HK$18.5 million. A special 1,712 sq ft flat, "Sky Latitude" with a 1,294 sq ft "sky garden" was sold for HK$26.5 million. The project has five residential towers totaling 1,159 homes.

Meanwhile, Cheung Kong executive director Justin Chiu Kwok-hung said the 1,068 flats at the Tin Shui Wai project Central Parks Tower II were all sold in three days since the launch on Thursday. Chiu earlier estimated the sales to generate about HK$2 billion.

The secondary home market is expected to be fueled by the good sales in the primary market, said Centaline Property research associate director Wong Leung-sing. "Home transactions in the secondary market may jump 9.1 percent and 11.1 percent by volume and value, respectively, this month, to 6,000 deals and HK$17 billion, when compared with March," Wong said.

The value of home sales in Hong Kong soared 86.8 percent month on month to HK$25.4 billion in March to hit a nine-month high, while the number of deals rose 58.3 percent to 7,102, according to data from the Land Registry.

"Earlier-than-expected signs of stabilization of major economies lead us to believe that various governments' stimulus measures could help restore homebuyers' confidence and bring forward the inflection point of price stabilization," Goldman Sachs analyst Anthony Wu said. The research house forecast prices in the primary market will fall 5 percent and that of the secondary market will be flat this year.

UBS analyst Eric Wong also upgraded home price forecasts "as credit conditions continues to normalize, mortgage competition returns, good stock markets boost confidence, and global quantitative easing raises awareness of the need to hold real assets instead of fiat money." Wong also believes the Hong Kong homes market will rebound earlier and faster than most property markets.

p/'s photos: Priyanka Chopra

Negative Equity In HK - A Precursor & Benchmark

The number of Hong Kong homeowners in negative equity quadrupled to nearly 11,000 in the last quarter of 2008 as the financial crisis took its toll on property prices. And analysts expect the figure to double this year as property prices fall by a widely expected 10 to 15 percent. Residential mortgage loans in negative equity increased to 10,949 at the end of December from 2,568 at the end of September 2008, according to the Hong Kong Monetary Authority.

What is negative equity: it means the amount you would still be owing after you sell the property and pay off your mortgage. For example, if you bought a house for 600,000 and you borrowed 500,000, which meant that you paid 100,000 as downpayment. Now the house is only worth 450,000 hence your negative equity would be 500,000 - 450,000 = 50,000. Negative equity is 50,000 but in actuality you have already lost 100,000 (downpayment) + 50,000 = 150,000 (not including the many monthly payments may have already made on the property).

HKMA chief executive Joseph Yam Chi-kwong said the increase was anticipated and that it will continue. "But I don't expect the situation will be as bad as in 1998 to 2003. Property prices are tending to remain stable at a certain level," he said.

While the developments are to be expected, what is more important is to see the negative equity figure as a benchmark as a severity of the recession. We must remember that Hong Kong saw a peak of 105,697 negative equity cases in June 2003 amid the SARS outbreak. So 11,000 is still very acceptable. But the the flip side is that the number in negative equity will rise exponentially and very swiftly if property prices were to slide in greater quantum for the next 6 months. Possibly another 10% slide in price would bring the negative equity figures close to the 2003 SARS level.

Pan Asian Mortgage Advisory economist Alvin Ho predicts the number of negative-equity homeowners will increase to more than 20,000 this year if property prices continue to decline. Real estate prices in the secondary market dropped 20 percent to an average of HK$3,410 per square foot in the fourth quarter from last year's peak of HK$4,251 psf, according to Midland Realty. The HKMA said the aggregate value of mortgages in negative equity rose 313 percent to HK$24.8 billion in the fourth quarter from the previous quarter. The unsecured portion of these loans rose to HK$2.7 billion. The loan-to- value ratio of the loans increased to 112 percent from 107 percent. The three-month delinquency ratio of negative equity mortgages fell to 0.05 percent from 0.08 percent.

Meanwhile, Yam said companies in Hong Kong have more than HK$100 billion in syndicated loans that are due to expire this year. The HKMA will take appropriate action and "the government should keep an open mind" to help financing, he said. "Foreign banks based in Europe and America may have to handle their own problems at headquarters by deleveraging. Their foreign business will then be affected." However, Chinese University associate finance professor Raymond So Wai-man warned that the government will come "under great pressure if it helps companies refinance debt."

Yam said there is a risk that protectionism could spread from trade to finance. As an example, countries are no longer buying US Treasury bonds. The HKMA intends to cancel its temporary provision of additional funds to banks at the end of March but will review the facility at that time to decide if it needs to be extended.

Amidst all the planning and forecasting, HK should remember that its monetary policy, property price and hence stock market are tied to their currency peg. The USD has been injected with a huge array of new "fundamentals" over the last 6 months - HKMA should really reconsider the HK dolar peg because the "integrity, outlook and volatility of the USD" going forward will be more like a horror movie. You cannot have your currency tied to highly risky, highly indefensible monetary expansionary policies somewhere else... the USD by virtue of their actions over the last 6 months have basically sentenced the dollar to a long drawn out period of weakness and losing stature as a reserve currency.

Revised Outlook For Malaysian Property

Readers of this blog will know that I have been pretty bearish on Malaysian properties, but even more so for Singapore and HK properties. The latter two have seen a 10%-15% price correction across the board. The funny thing is that Malaysian property is holding up pretty well.

Over the last few days a couple of things struck me about Malaysian properties, which have eluded me, and many property analysts. We always look at the same indicators: affordability ratios, employment trends, rental vacancies, occupancy rates, ratio of income to mortgage, etc.

Somehow there are a couple more reasons which seem to dictate the underlying strength of local property prices.

a) Open economy - The more open your economy is to free trade, the more susceptible you are to global financial turmoil. Hence explaining much of the distress in HK and Singapore economies. Theoretically speaking Malaysia should be affected just as bad, but we are not. I would like to cite this as the Shenzhen effect. Malaysia has what I would coin as the "Shenzhen effect". Its when a place can be used to produce goods and services more cost effectively. We also must remember that we are in a massive globalisation mode for the past 15 years, with the pace rising over the last 5 years. There is no way you can bring back those jobs to Singapore, HK or the US unless maybe if the Sing dollar goes to 1.5 vs the ringgit or the HKD drops to 15 HK dollar to the USD.

The key point is that when global companies decide where to cut cost or restructure, they now tend to leave Malaysia alone. You cannot cut manufacturing outright, you reduce shifts and capacity. But you can cut services and managerial headcount easily and the numbers make more sense out of places such as Singapore and HK. I give you another example, in investment banking, a senior analyst may be paid a US$300,000 package in South Korea or HK, but a similar position in the same firm in Malaysia may be paying just US$120,000. Its not all equal. And when top managers strategise on where to lop off manufacturing and investments, Malaysia will almost be the last to be chop.

Why? Multi lingual work force, relatively hard working staff (I said relatively), very cheap land cost, very cheap building and facility cost, excellent ports and road networks to ship in and out, reliable and effective air travel hubs in the country, much safer and stable politically, less risk of war or internal unrest, high degree of safety from terrorism, its Islamic yet Islamic neutral for businesses which is a highly coveted position to all, strategically, its position is important for shipping services.

b) Many have over invested in India and China, hence some operations investing may be delayed or see its capacity being shrunk there. HK and Singapore are the high value add sectors and are also highly leveraged to global financial markets, they cannot hide. Hence we cannot and should not lump Malaysia together with HK and Singapore. yes we will see some jobs lost but it should not be anywhere near the cuts we are seeing in HK and Singapore.

We always just talk about speculation in markets, but we should also look at sectors or countries that have over invested (either from domestic or foreign sources). Singapore has over invested in private bankers, same with HK. Singapore has over invested in Sentosa and the outlying real estate areas where prices are totally out of whack - we are seeing Monaco prices and the weather is too damn hot! China has many areas that have seen over investment as well.

In terms of speculation, Singapore is topping the charts with the en bloc sale, which proceeds are then geared up to speculate in the many luxury condos. Enough said. Specuation is there in Malaysian properties, in particular the high end condos - we have never been able to maintain very high prices in condos because most people still prefer houses and land. The only time we see RM1,500-3,000psf is in a bubble. The correction will be most severe in those above RM1,000psf which may see a 15%-20% drop. The RM500-999 psf may see a drop half of that. Landed properties below RM1.5m are still pretty solid and may only see a 5% drop from their peaks. Those under RM3m may see a slight ease off but it should not be major. Higher than RM3m, they are in a world of their own.

c) The stock market effect - If you were to look at the financial turmoil in the past, namely, the mid-late 80s, the blip in 1994, the major monster of 97, the internet bust, the SARS effect, the tsunami effect and now the credit implosion... you can chart a very useful multiplier effect from losses in the stock markets. Prior to 2000, any kind of financial bust ups will see a lot of havoc and bad debts, ask any remisier... Following moves to limit contra and contango trades, this has removed a HUGE "leveraged disaster" from the domestic economy.

I can give you the excellent example of my 6 analysts working with me in mid 90s, their monthly salaries between RM3,000-10,000 and basically under 30 and real net worth probably zero. But each and everyone of them will have zero deposit with 2 or 3 remisiers, but personally will have a contra position of between RM100,000-300,000 in a few stocks depending on the mood of the market. This is not unique to my team of people, everybody everywhere were doing it. Naturally we always see a huge multiplier effect when the market corrects 10% over a week.

Since 2000 any major financial calamity has not seen similar catastrophic personal financial aftermaths. Now you try to buy RM50,000 worth of share with zero deposit, your remisier will ask you to fly wau. This market correction was also unique to the majority of retail stock players. Many were able to sell down most of their stocks or just stop playing stocks when the market retreated from 1,400 to 1,200... sure some will still hold a few stocks in their portfolio but many have been able to avoid the carnage. When a market falls from 1,400 to 850 its the holders of the shares that bear the brunt.

This time around retail players have been able to sidestep much of the disaster movie, its the funds that got whacked royally this time, ... local, hedge and foreign. Thus this will further help explain why most Malaysians are still relatively cash rich and under invested. Fewer job losses and fewer after effects from the stock markets = less likelihood to need to sell properties in desperation.

I am working on a big piece on the Market Prognosis for 2009, stay tuned, will be out in a couple of days.

photos: Pace Wu Pei Ci

HK Property Confidential

• Hong Kong's home sales fell 58% y/y in volume and 63% in value transacted in October as local lenders tightened mortgage lending amid a slowdown in the economy - this is the largest drop since 1999 and the fourth consecutive monthly decline. Bank lending rose 13% in September, the slowest in over a year, and almost half the 24% increase in August. Office rents in Hong Kong may experience a 20% drop by the end of 2009.
• Banks have not lowered their prime rates along with the 0.5% cut in the US interest rate and are adopting more conservative mortgage lending policies (loaning less and scrutinizing borrowers more).
• Prices have been sticky downwards in HK (even stickier in Malaysia as many sellers are waiting for firmer prices with arrogance) as many home-owners have only just
  woken up to the fact that the market is heading into a protracted downturn as
  opposed to a brief correction. Average prices have only fallen 14% from the peak (Prices have already fallen 14% in HK and probably the same in Singapore... in Malaysia, it has not budged much yet... watch for first out best dressed action soon..). The high-end segment is still outperforming and faces more downside risk. home-buyers may be canceling transactions by forfeiting the deposits and delaying completion date of the transactions.Equity prices remain above their historical lows.
• Citigroup: downward spiral in the Hong Kong property market will continue for the next 12 months - potential push back in completions and the lack of new land sales by the government will result in further declines in construction activities, leading to rising unemployment in the sector, and deal a further blow to the economy (through other industries like property agency, interior decorations, furniture and fittings, consumer electronics) which in turn will adversely affect housing demand.
  
• Hong Kong's prime office rents surged 33% in the 12 months ended May 2008 (Colliers) but most assume that their growth will slow over the next year
• During the 2nd quarter of 2008, prices fell in several segments of Hong Kong’s property market. Smaller sized apartments were especially hit badly but property prices were strongly up over the year. The overall index rose 25.4% (19.4% in real terms) to end Q2 2008.
  
• Strong consumption growth has been propelling residential and commercial property prices upward while negative real interest rates have been supporting the creation of new development.Robust labor market has kept demand for commercial space tight (PREI) But with credit costs rising and slowing economic growth, Hong Kong's property market could be vulnerable.
• PREI: total housing transaction value in the second quarter fell by 4.6% from that of a year before.
• Decline in global shipping on higher costs/slower demand for raw materials might have negative effect on warehousing demand which has been a driver of retail property demand.
• Jones Lasalle: despite slowing consumption growth, leasing costs have been rising. Sales volumes have fallen but so far prices are holding up so far (through mid Q3).
  
• Residential property prices were accelerating early in 2008, from 10.1% yoy increase in June 2007 to 27.7% in January 2008. Prices at the luxury end of the market are already back at 1997 levels. Low borrowing cost at 2.5%, high property yields at 4%-5% made property investment more attractive.

p/s photos: Fala Chen Fat Lai (Men love fast powerful cars like Lambros, Ferraris, Aston Martins and Porsches... not because they really appreciate the engine specs and mechanics... but because they have never seen an ugly woman get out of one)