I posted about this as an aside to another topic (landlord breaking lease) but feel it deserves it's own thread.
I've been in HK for over 20 years and yet don't remember meeting anyone else who has (admitted to) having the experience of having their home compulsory purchased by the URA. (either as a tennant or an owner)
So I'm wondering if anyone else here knows anything about the process.....and the potential opportunities it represents for investment?
It seems there is an understanding amongst HK locals that purchasing properties with a high likelihood that they will later be scheduled for redevelopment is a strategy to open up potentially very good profits - if you're lucky.....
In my friends case, owner occupiers living in their flat in the building were offered $24,000 /sqft to sell and I estimated that to be around 50% above market value for a high floor walk-up last year.
Anyone else have similar/differing experiences?
Joining that gravy train seems like a very real possibility for those with some spare liquidity who are prepared to buy in a crappy building.
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My friend's experience for the record:
The building they lived in was compulsory purchased by the urban renewal authority last year.
It was an old walkup building, a very nice (by rental standards -but mostly it was her good furnishing taste that made it) flat on the top floor in SYP.
At 24k/sqft you can imagine the potential for profit even without all the capital appreciation of the last 15 years, 50% (ish) on top is a very attractive bonus (though the offer from the URA would be less than 50% if you were buy to let)
My friend was renting, her contract had expired, she'd been there over 3 years and the contract was just rolling over month to month, so in purchasing, the URA could have given her 1 months notice.
Instead, they paid her 35 months rent compensation to move out.
Naturally the URA are developing the building (and a couple of others next door) they'll be knocking them down and building something much taller and thus creating far more flats for the same footprint, which involves vast sums of new money for those plots....