View Poll Results: How much (%) of your household income do you spend for your housing rental?

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  • Less than 5%

    20 4.50%
  • 5.1 to 10%

    32 7.21%
  • 10.1 to 15%

    46 10.36%
  • 15.1 to 20%

    61 13.74%
  • 20.1 to 25%

    79 17.79%
  • 25.1 to 30%

    89 20.05%
  • More than 30%

    117 26.35%
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How much (%) of your household income do you spend for your housing rental?

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  1. #21

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    both.
    1. deterioration. not many flats are well maintained.
    2. the shortening duration of remaining tenor. a bank wld not want to give loan if they compute that the house would have zero value at the end of the lease holding period (generally 60 years in hk) adn they can't sell it away if you default.


  2. #22

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    Quote Originally Posted by RastaMan
    Thanks freeier. Interesting thaughts.

    But a 20 years old property in HK is not worth much. Right? There seems to be quite a lot of depreciation in properties here. For some reason, everybody wants a new one. And the climate doesn't help.

    If that's the case, why are 20-year old properties just as expensive? For example, Harbour View in KT is only a 30% cheaper compared to the Merton.

    So you mean freeier, if the interest rate is around 3-4%, then it's more worth it to buy?

  3. #23

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    yes if interest rate is low, it makes sense to buy.
    but u have to find a way to lock the interest rate below the market rental yield.

    the reason why property value is still high, becuase
    1. not many ppl are aware of the potential pitfall, or they choose not to be aware of it. remember one guy previously coming in to sell his 25y.o. CWB apartment and claiming that the government is willing to extend all leases for a 'nominal fee'.
    2. the 2047 deadline is the same for everyone. so that cld be a reason why no difference between merton and harbour view.

    interestingly, most people are not aware of the 'lease' period of a property.
    technically apartments purchased are built on land that is rented from the government or from someone. some are longer lease some are short lease. some are permanent lease. this is a fact that i realized not many hkers are aware.


  4. #24

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    Thanks, freeier.

    My company has this plan that maximum interest is only 4%. But of course I have to assume I'll stay here forever

    The lease period is something I need to think about. Since if I buy that would be next year, it's okay to think about then...


  5. #25

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    Quote Originally Posted by coolgirl
    If that's the case, why are 20-year old properties just as expensive? For example, Harbour View in KT is only a 30% cheaper compared to the Merton.
    30% doesn't seem very little to me...

    Also, you can't just compare two properties. Harbour View might have a better view, be in a nicer area, more accessible, more shopping centres, more schools, more whatever. Though I have no idea where HV and Merton are.

    Are there statistics on the depreciation of properties in HK? I wouldn't be surprised if it was much higher than in Europe.
    Last edited by RastaMan; 13-11-2006 at 08:02 PM.

  6. #26

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    point is, if as you said buildings depreciate fully after twenty years, you would see absolutely cheap cheap buildings, and lots of them. but this is not the case.


  7. #27

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    no. they don't depreciates after 20 years, but after 20 years from today. which is 2026 and its 21 years from 2047.
    banks wld be reluctant to give a loan for the purchase of a property that might be of zero value at 2047, i.e. in 21 years time. that's where the paper value of apartments become at risk


  8. #28

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    Then if you buy in the next few years, it should still be okay, noh? Is the lease for the land different per property?


  9. #29

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    Quote Originally Posted by coolgirl
    Then if you buy in the next few years, it should still be okay, noh? Is the lease for the land different per property?
    Of course it's different for property. Me thinks that when a developer decides to build something he gets a 60 year lease on the land. So every property has a different lease for the land left. I believe that's how it works in Europe, and I believe it's the same here.

    Of course the property depreciates after 20 years. Depreciate means "reduce the value". It doesn't mean that after 20 years the property is worthless. It even depreciate after 5 years, for that matter.

    Coolgirl, no offence, but if you want to put 4 million bucks in a flat, I think you should find out first all the nitty gritty of that investment.

  10. #30

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    ya the 60year description is generally correct, but there is also teh 2047 trigger for HK which nobody has a clear answer of. so, its a regulatory risk you have to take.


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