Opinions on village houses

[Topix]

Hi everyone,

What are your opinions on the village houses in places like Yuen Long? The prices in such areas seem remarkably low compared to other areas (I've seen some only around 1m hkd for 700sqft), and if you don't mind the commute, it seems like a really good buy. I would intend to live in it for at least a few years and pay it off in 5 if possible.

Do others think it seems like a good long term investment? As I'd be aiming to pay off the mortgage in a short period, it seems a good time to take advantage of such low interest rates.

Cheers

[Topix]

One further question - it there generally a minimum amount you can take out on a mortgage loan in Hong Kong? Based on a property of say 1.2m, I'd be aiming to put down a deposit of 500,000 so would only require a mortgage of 700,000. Would this be possible?

Thanks again

[PDLM]

I can see no reason to pay off a mortgage when the interest rates are so low. Borrow as much money as you can at 1.2-1.5% and invest it for a solid 4-5% return, giving you 3% free money. At $1.2M, 70% mortgage that's $2-3000 per month of extra income.

[Topix]

What sort of investments are you suggesting? I'd have thought the yield on investments is also generally much lower at the moment in line with interest rates. Obviously there are such investments out there, but with higher yields comes more risk, and with that sort of money I think I'd really like to keep risks to a minimum.

I can see your point for sure, I just like the idea that I could be mortgage-free in a matter of years... seems like a pretty good opportunity to put myself in such a position.

[PDLM]

For example, I have a large chunk of Hong Kong Electric shares - solid 4-5% dividend, and low volatility share price with steady growth of around 5% per year as well.
Hongkong Electric Holdings Limited: HKG:0006 quotes & news - Google Finance

Being able to be mortgage free is what's important. Not using the free money on offer when the interests rates are this low is a missed opportunity. You can always simply sell the investment and pay off the mortgage if interest rates rise above the return you're getting on the investment.

[Topix]

Yes I see your point... thanks for the advice. I don't know much about the HK stock market having only ever invested in the UK, but maybe I should start investigating further...

[Buddhist Art]

Security will be a issue.

[carang]

Security will be a issue.

what an utterly ridiculous statement! out of almost 16 years here, i've lived in village houses for about 6 of them.... not once have we been broken into...in all of that time, i've only heard of ONE house having a break in.

[MovingIn07]

what an utterly ridiculous statement! out of almost 16 years here, i've lived in village houses for about 6 of them.... not once have we been broken into...in all of that time, i've only heard of ONE house having a break in.

While I don't disagree with you (we don't lock our doors), you probably should point out that you live in a house full of dogs!

[bryant.english]

While I don't disagree with you (we don't lock our doors), you probably should point out that you live in a house full of dogs!

Yes but I think Carang lives in an old village like mine. A burglar would be nuts to come into my village the amount of curtain twitching that goes on and the fact that many of the villagers are related somehow. Also, I wouldn't like to say with certainty that the police would be called if a burglar were caught here...