A family earning 120k USD wants to buy a property. After 15% taxes, the family has US$8,500 per month and medical care (not great but they won't lose their house if one got cancer).
Hong Kong
Price: USD$775,000
Cash needed
25% : US $193,000
20% down + 1% agent + 4% stamp
Monthly expenses
$2300 mortgage (30yr at 2.15%)
$250 management fee
$400 yearly taxes $200 month utilities
Total $3150 per month
* About 15k USD per year in the beginning goes towards equity.
US - the family could only qualify for US$400,000 property due to their low salary. But let's say 775k for comparison. A family earning US $120k per year can expect to pay about 35-40% taxes (federal + state) leaving them with $78k per year or $6500 per month. Insurance for a family would easily cost $1000-1500 per month.
Cash needed 20% down conventional loan
US$155k
Roll the other costs into the loan 3% closing costs
$638,000 loan 5% over 30 years
Mortgage $3425
Property Taxes 2% $15500 per year ($1291 per month) * property taxes vary by state and could be much higher or lower usually depending on the school system (if it's good then you pay more)
Utilities ($300-500/month) * my heating bill in the winter would easily be $1000 per month
Association dues (assume it's a house with no dues)
Total $5000-5200 per month
* Due to the high costs, interest rates, a very small portion is applied towards equity every month.
Now a US family likely pays $150-200 per month for 3-4 mobile phones, $100 per month internet / cable, car payment $300-600 per month, car insurance $200-300 per month.
Now at this point still uninsured and didn't even count in food costs.
Clearly shows why most Americans live check to check and their money is already dictated where and how it will be spent.
The answer is clear to me. HK is better value and bang for your buck. Also the upkeep and maintenance of a HK property is SO much easier and cheaper than US properties. Now rental returns are much higher in the US, but that's another story.