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Buying as opposed to renting?

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  1. #11

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    On top of it, a 300K Pound property doesn't necessarily get you much these days particularly on the island. That's a tiny 500sq ft two bedroom in Mid Levels for example. You choose to go out to a less desirable area for a better price however the banks would possibly require a higher downpayment particularly in light of recent comments that mortgages would be tightened. These kinds of property often fall first and are last to get back after crashes...

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  2. #12

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    I was merely projecting forward a year or two and thinking more of village properties in the NT or on the islands. The housing market is almost as dead as the proverbial dodo here, so equity whilst you wouldn't want to lose it, has very little future. I was just wondering whether buying into what could prove to be a less dead market, may prove more fruitful than renting at exorbitant prices.


  3. #13

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    There are many ESF teachers that have bought village houses. It can be a very nice setup particularly with kids however the banks will want a large downpayment and village houses are not known to rise as much in prices and they don't sell as easily as flats in big developments.

    If you think you'll stay here a while, it's certainly worth looking into and you'll have many colleagues available for help and experience in the matter. As to the market and its prospects...it's high and anything can happen.

    In the long term, you can't escape the fact that land is limited and controlled by the government and that the population here keeps increasing. Supply and demand dictates that you're unlikely to fail in the long run. However, there's always some kind of crash or crisis around the corner so it's to be expected that there will be fairly severe downturns... Problem is always with getting the timing right. If you're patient, it's not as much of a problem.

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  4. #14

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    The points you make, Gilles, echo my initial thoughts. Whilst a crash is always possible, here the state of play is that it is almost pointless holding equity or savings, such is the prognosis for the next few years.

    So if one were to find a more buoyant market where demand was always going to be high, whilst capital values may fluctuate or crash, the rental market would always assure you of an income to compensate any fall in values.

    Presumably, even if one left HK, one could rent the property out at the aforementioned exorbitant prices?


  5. #15

    Rental yields are poor already. And rents fluctuate up and down as much as the price - demand is not always high. I still remember with glee forcing landlord to drop my rent 30% every year back 2000-2003. Which unfortunately reversed.

    Rents seem exorbitant in Hong Kong. But they're not exorbitant compared to the property prices.

    The 15% extra stamp tax on non-permanent residents makes it impossible anyway. For a million pound property you're literally throwing away 150,000 pounds. Even the exorbitant rents are little next to that. And you don't get much for a million pounds anyway.


  6. #16

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    I would say the market price has been dropped a lot due to the government's sharp increase of the stamp duty. For non-permanent- resident homebuyers, the gov has recently imposed a 15 per cent additional stamp duty. The house price obviously dropped after the gov imposed the second policy but soon the price will go stable again after people have get used with the new policy and the rental price might rise again.