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Was Waiting To Buy Bad Advice?

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  1. #21

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    Feb 2009
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    Of course anyone who didnt buy 4 years ago should kill themselves now. I bought 3 years ago, my property is up 35% (over $2m increase), and I am locked in on one of those fantastic H+0.7% mortgage rates (total interest rate 1%) that means of my $23k monthly repayment only $3.5k is interest and the rest is principle reduction.

    $3.5k monthly interest expense (plus other incidentals such as $2k management fee, etc) vs $30k for rent (that would be the approximate figure to rent my apartment). This is essentially what it boils down to.

    Now its possible prices are going to come down a bit. Maybe they will, maybe they wont. But they are going to have to crash drastically (like over 40%) for me to really care in the slightest.

    I dont really want to brag, anybody who bought 3-5 years ago will be in exactly the same position. But just to be absolutely certain crystal clear, if you had an option to buy 3-5 years ago and did not, it was one of the biggest mistakes of your life.

    Now the question for me is whether I should sell or not? I dont want to give up the 1% loan I have now, thats probably the biggest reason holding me back.

    Mat, audiot, Skyhook and 4 others like this.

  2. #22
    Quote Originally Posted by bdw:
    Of course anyone who didnt buy 4 years ago should kill themselves now. I bought 3 years ago, my property is up 35% (over $2m increase), and I am locked in on one of those fantastic H+0.7% mortgage rates (total interest rate 1%) that means of my $23k monthly repayment only $3.5k is interest and the rest is principle reduction.

    $3.5k monthly interest expense (plus other incidentals such as $2k management fee, etc) vs $30k for rent (that would be the approximate figure to rent my apartment). This is essentially what it boils down to.

    Now its possible prices are going to come down a bit. Maybe they will, maybe they wont. But they are going to have to crash drastically (like over 40%) for me to really care in the slightest.

    I dont really want to brag, anybody who bought 3-5 years ago will be in exactly the same position. But just to be absolutely certain crystal clear, if you had an option to buy 3-5 years ago and did not, it was one of the biggest mistakes of your life.

    Now the question for me is whether I should sell or not? I dont want to give up the 1% loan I have now, thats probably the biggest reason holding me back.
    so you didn't actually make any money.
    if the market crashes tomorrow, before you sell, then you will not have made that 35% increase. Depending on how long it takes the market to surpass the recover and reach these exceedingly high values that you purchased at may be a few years, or could be 20 years. Depending on when/if you reach a point where you must sell and can not wait any longer...you may have to sell for a loss.

    so...... yeah. if you bought 5 years ago and are selling now for a profit, then great job. If not, then you really have nothing to brag about.


    edit: and FYI... i am jealous, as i was not in a position to buy 5-6 years ago. but if i had, i certainly would be selling urgently, as i do believe the market will collapse soon. unfortunately i was only ready to buy within last year or so, and do not feel confident in the market enough to purchase since then.
    Last edited by BaconBreadBaker; 02-11-2012 at 05:01 PM.

  3. #23

    Join Date
    Jun 2004
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    HK
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    Quote Originally Posted by BaconBreadBaker:
    so you didn't actually make any money.
    if the market crashes tomorrow, before you sell, then you will not have made that 35% increase. Depending on how long it takes the market to surpass the recover and reach these exceedingly high values that you purchased at may be a few years, or could be 20 years. Depending on when/if you reach a point where you must sell and can not wait any longer...you may have to sell for a loss.

    so...... yeah. if you bought 5 years ago and are selling now for a profit, then great job. If not, then you really have nothing to brag about.
    We've debated this ad nauseam with Gritty a year or two ago.

    It's called an unrealised gain or loss.

    PS: even if bdw had to sell for a loss you also have to factored in the cost of rent etc etc....not something a few exchanges in an internet forum will determine.

    Bottom line is BBB you didn't buy, you made a choice, bdw bought and made a choice.

    Let see who wins but right now (at this point in time, not yesterday, not tomorrow), bdw is in a better seat than you.

    EDIT: ok so you edited your post a bit above and indeed you are right - many were not in postiion to buy 3/4 years ago and purchasing earlier this year was certainly riskier than 5 years ago.
    Last edited by Mat; 02-11-2012 at 05:05 PM.

  4. #24

    Join Date
    Dec 2009
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    Quote Originally Posted by bdw:

    Now its possible prices are going to come down a bit. Maybe they will, maybe they wont. But they are going to have to crash drastically (like over 40%) for me to really care in the slightest.
    and even if you lost all your "gains" from the property price going up. its not like you have to pay back all that "cheap" rent you paid for the last 3 or 4 years....

    I just wished I'd bought a better place 4 years ago, this one is OK, but I sometimes wish I hadn't rushed and waited for a rooftop place...
    bdw likes this.

  5. #25

    Join Date
    Oct 2008
    Location
    Hong Kong
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    194
    Quote Originally Posted by MovingIn07:
    You don't need to live in a place to consider buying one as an investment. I have (considered it) and have not purchased. I think HK property is one the riskier investments one could make. Risk means possibility of high returns, or high losses. I think we have seen plenty of high returns, and in the past some investors made big losses too. My personal risk preference is for less volatile investments (particularly since I already have some exposure through the boat and plenty through properties in other countries).

    If I wanted to actually LIVE in a HK appt the story might be different, but I don't. That's my idea of hell

    I was mostly responding to the poster who seemed to think that people only say negative things about house prices because they are bitter and jealous, which was almost funny but not exactly rational.
    MovingIn07, it's pretty amusing and almost embarrassing you had chosen to direct your frustration at random people.

    Let's be clear about the facts, MovingIn07. It's not my fault that you didn't have the vision nor insight of the economics to recognize a buying opportunity when it existed.

    It's not my fault that you wanted to invest in property, as you've admitted, but missed out on the greatest property market run up in the world.

    It's not my fault you are still only living in a boat.

    Perhaps instead of venting to random people, you should buy a mirror in your boat and direct your frustration to that person in front instead.

  6. #26

    Join Date
    Feb 2009
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    My regret is a bit like yours, audiot. I wish 4 years ago I had bought a $10m place rather than being conservative and bought a a $6m place. Now I really would like to sell and 'upgrade' but cant because 1) this new tax, 2) because I have a fantastic 1% mortgage that I would forfeit and have to get a new loan at 2.1% or whatever the going rate is now. So Im kind of locked into where I am.


  7. #27

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    Feb 2009
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    Quote Originally Posted by BaconBreadBaker:
    so you didn't actually make any money.
    if the market crashes tomorrow, before you sell, then you will not have made that 35% increase. Depending on how long it takes the market to surpass the recover and reach these exceedingly high values that you purchased at may be a few years, or could be 20 years. Depending on when/if you reach a point where you must sell and can not wait any longer...you may have to sell for a loss.

    so...... yeah. if you bought 5 years ago and are selling now for a profit, then great job. If not, then you really have nothing to brag about.


    edit: and FYI... i am jealous, as i was not in a position to buy 5-6 years ago. but if i had, i certainly would be selling urgently, as i do believe the market will collapse soon. unfortunately i was only ready to buy within last year or so, and do not feel confident in the market enough to purchase since then.
    Agree I havent realised any gains and could lose them all in an instant. But each month for the last 3 years, Ive been paying $3.5k interest instead of renting for $30k. This was the reason I bought in the first place, to avoid paying rent in the most expensive rental city in the world. My logic is I can buy, then when I leave HK I can sell and get my money back so to speak. At the time I bought, I did not factor in or anticipate any increase, and in fact already prices were high and not many people recommended I buy. The fact I have made $2m capital appreciation on paper is just a 'bonus'.

  8. #28

    Join Date
    Mar 2007
    Location
    Gold Coast Marina
    Posts
    17,934

    Bdw - that's exactly how I view my boat purchase.