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Buying a flat in HK: what will the market do?
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| posted by RastaMan 210 days ago |
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G'day mate.
My landlord wants to sell, so i have to move out. What do you people think the housing prices will do in the next couple of years? Will the price of flats go up or down? I heard that the price is expected to increase 10% next year. But then with the credit crunch in the US, will it not also affect the price of housing in HK?
I am going to see my banker, so let me have your ideas too. Please! :)
I want to die peacefully in my sleep, like my Grandfather.
Not screaming and in terror, like his passengers.
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| posted by Load Toad 210 days ago |
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It's supposed to keep going up the prices 'they' say are not as high as '97, 'they' say that there are lots of people looking for homes and 'they' say that those people have enough cash and good credit.
But then again 'they' would say that.
Anarchist governments eh?
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| The Maintenance Man |
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| posted by ServerGuy 210 days ago |
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Prices are going up, I can see that just from what we purchased our place for to what the agent says its worth now and the costs of other properties of the same type.
Also remember, all the time your paying rent, your just paying someone elses mortgage, might as well purchase and pay the money into your own mortgage.
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| posted by xpat-Aussie 210 days ago |
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Interest rates going down = housing prices going up. If prices go up by only 10% next year, I'll be amazed!
"...and once you have tasted flight,
you will walk the earth with your eyes turned skyward,
for there you have been and there you long to return...."
-Leonardo DaVinci
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| posted by Gimpmask 210 days ago (edited 210 days ago) |
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I think it also depends on how long you are looking to stay. Bearing in mind you will have to throw in an additional $300k-500k+ to do the place up (depending on the size and the condition of the property). You have to include that sum in your calculation. In the long run, it's worth it.
Oh, you have to price in Stamp Duty (at approx. 3%) at well.
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Having testicles is like being chained to the village idiot.
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| posted by wanchai 210 days ago |
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if you buy a flat 1mill above bank valuation and add 500k for renovation. how you ever can make money???
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| posted by Gimpmask 210 days ago |
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in 6 months, unlikely.
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Having testicles is like being chained to the village idiot.
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| posted by Load Toad 210 days ago |
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I'm signing for a condo thing today so I guess that shows that I'm confident.
Anarchist governments eh?
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| The Maintenance Man |
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| posted by ServerGuy 210 days ago |
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Where is your "Condo Thing" loady ?
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| posted by geraldo 210 days ago |
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probably somewhere down the beermuda triangle
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| posted by Load Toad 210 days ago |
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Nah - its at Whampoa - that Harbour Place thing - price looked OK for what I had in mind. Or rather what the Mrs had in mind!
Anarchist governments eh?
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| posted by Paps of Jura 210 days ago (edited 210 days ago) |
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My thoughts Rastaman are that the price of properties will keep rising for the next 12mnths by at least 30 - 40% then we may have a small fall towards the end of 2008
Things to consider tho when you buy.. not all areas rise .. so areas are not so desirable eg the prices in Tung Chung have not risen at anywhere near the rates that say Mid levels has
If you buy a place that is in a s**t condition do not pay more than 10% over the bank valuation... If it's an amazing new renovation then paying over bank valuation is Ok but within reason
Make sure you get a variety of bank valuations before buying... HSBc valuation are always more on the conservative side
If you need more than a 70% mortgage then you will have to also deal with the HKMC which means you will most probably have an early redemption penalty (that's if you want to sell it soon after buying) and cannot rent it out to a tenant
Think that's enough tips for now
Dib Dob nib knob
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| posted by xpat-Aussie 210 days ago |
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quote:
Originally posted by Paps of Jura
My thoughts Rastaman are that the price of properties will keep rising for the next 12mnths by at least 30 - 40% then we may have a small fall towards the end of 2008
I wouldn't be banking on that sort of figure, you'd need all the planets to align, and then bank on some serious luck before that prediction comes true. Some proprties will perhaps rise buy nearly that much, but only very, very few. If you get another say, 10 interest rate cuts in as many months... you might just get there. Never even look at potential yearly growth estimates when it comes to property, instead, examine the long term trend (ie: 10 years +).
I thing 20% is a more reasonable prediction, which in itself is a bloody good increase for any one year period.
"...and once you have tasted flight,
you will walk the earth with your eyes turned skyward,
for there you have been and there you long to return...."
-Leonardo DaVinci
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| posted by Paps of Jura 210 days ago |
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Well I beg to differ.. but anyway your the money man
For example my place in Soho has already risen by about 35% in 6 months and I reckon could get another 10% out of that... but as I said areas important
Keeping ears to the ground on the market with local agents is also key
Dib Dob nib knob
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| posted by Randy_Clapp 210 days ago |
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The missus and I are seriously considering delving into property this year as first time buyers without a clue, be it in HK or Oz.
Are there any books on the topic worth reading (HK or Oz, doesn't really matter)?
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| The Maintenance Man |
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| posted by ServerGuy 210 days ago |
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Aussie, I got a flat in DB around September for HK$ 2.82m, I then spent HK$ 350k on a full renovation.
The agents are now saying I could sell for around HK$ 4m today, thats quite a good rise if you ask me 
If you have got any problems with this site send them to Support@HKExpats.com Thanks
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| posted by xpat-Aussie 210 days ago |
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Great rise of course, but that's on the tail of a very fast jump recently. I'd say, if you could make 25% in less than 3 months, then sell it. I wouldn't take what the land rat is telling you for gospel though.
When prices of anything jump that fast, it's not sutainable at the same rate. Land rats (ie: Real estate agents) are probably the worst people to talk to about property prices in my experience :)
I hope prices do rise at that rate, as you'll all clean up and this will please me greatly. Remember though, the sub prime mess in the USA, where people borrowed money on the expectation that their property will be worth 20% more in a years time, but in fact are worth 20%+ less!
The time to buy here (in my opinion) was 2-5 years ago.
Lowering interet rates are the property sellers friend, as long as the USA keep lowering rates, HK property will rise. Looking at the US inflation figures though, we don;t have many cuts to come, so be very careful!
"...and once you have tasted flight,
you will walk the earth with your eyes turned skyward,
for there you have been and there you long to return...."
-Leonardo DaVinci
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| posted by RastaMan 210 days ago |
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Thank you all for your advise.
i went to see the banker, and then talked to some agents. Plan to visit flats on Sunday.
I am eying flats in townhouses (i.e. village). The flats would be almost 3 million, 3rd and last floor with roofgarden, 5 minutes walk from a KCR station. That would be about maximum what I can afford, and it looks like a great area. My concern is the age of the building: 20 years! Isn't that a 'very old' building in HK? The banker said it's very old, and the maximum they would give me is a 15 year long mortgage (subject to approval by the big boss!!). What do ya people think? Of course a new condo is a better investment, but I don't really like to live on the 20th floor (as I do now). Seems like ant-living!
I want to die peacefully in my sleep, like my Grandfather.
Not screaming and in terror, like his passengers.
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| Senior Member |
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| posted by Paps of Jura 210 days ago |
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It all depends on how much you want to borrow from the bank to fund that property... Is it a 70% or below mortgage ? You have more flexibility with that
Be careful also with village rights on village houses I am not fully up to speed on it but Indigenous land rights can mean that you don't fully own your property.. I would do more research and tread carefully
Very old bldg in HK is over 30 years so you should be OK to get a mortgage for somewhere at 20 years
Dib Dob nib knob
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| posted by RastaMan 210 days ago (edited 210 days ago) |
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Thanks. I would get a 85% mortgage, or between 80 and 85%, because I only have 1/2 mio bucks in the bank.
About the length of the mortgage, the banker I just talked to said that I can get a mortgage, but usually only for the first 25 years of a building, so normally they would only give me a mortgage for 5 years. BUT if the big boss agrees they can give me longer. Perhaps 15 years altogether, but very unlikely more than 15.
Apart from the feasibility from the part of the bank (I will find that out later), if I want to sell the property once I paid it off (in 20 years), and the building will be 40 years old, will my flat have any value? In HK any building older than 30 years seems to be ancient history and pretty worthless because nobody wants to buy it.
What do you mean with the Indigenous rights land that I have to be careful about? I would own 1/6 of the house, but I don't think I would own the land. Don't only Akka are allowed to own land in HK? So I guess if my flat has no value in 20 years I won't get anything, because the land belongs to someone else, right?
I want to die peacefully in my sleep, like my Grandfather.
Not screaming and in terror, like his passengers.
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| posted by Zebedee 210 days ago |
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I'm very bullish with HK property, but 40% in next 12 months is seriously head-in-the-cloud stuff, no financial fundamentals to support that theory other than guess work, sorry to sound rude; but nevertheless, when in investing in property should always look at 5-10yr view, rather than 12 month view. My view, likely interest rate movements and low supply will help HK property in 2008, but beware a slewth of new property is hitting market at end of 2008 to 2010, so will affect prices. End of 2007 early 2008 is supposedely the least supply of property on market in HK for almost 30yrs, but this won't last. Finally, both property and equity markets in Asia are entering a period of being caught between their own soundly based fundamentals and the precarious state of other economies around the western world i.e. as you'll read in almost all commentaries, HK will always be affected by what happens in US and Europe, and both these places are looking to be in trouble throughout 2008-2009.
Whatever...
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