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How long did you wait before buying a place in HK?

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  1. #21

    FWIW, there have been times when you could buy with a 30% deposit and have 20 year P+I mortgages with lower payments than rent. For a short period there were developers offering 2nd mortgages for 25% on payment free terms for the first 4 years - meaning you only had to put down a 5% deposit.

    I would be surprised if you could get positive cash flow on a 40% or 50% deposit these days. But as long as the double stamp duty is in place I have no interest in buying again for investment purposes.

    If buying for home use, given the very high transaction costs, I would need to be very confident that I would be living in Hong Kong for a good number of years to be tempted.

    Last edited by traineeinvestor; 13-02-2024 at 02:00 PM.
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  2. #22

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    Quote Originally Posted by aw451:
    For me the 30% SSD has always been the turnoff. Yes it's refundable when you become a PR but you still have to cough it up in cash upfront which is unpalatable to me.
    If you're in Hong Kong on a GEP visa, you're now exempt from paying the 30% SSD (for property contracts dated 25/10/2023 or later).

  3. #23

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    Quote Originally Posted by qhank:
    If you're in Hong Kong on a GEP visa, you're now exempt from paying the 30% SSD (for property contracts dated 25/10/2023 or later).
    Do you have a link? Last I was aware you have to wait until you become a PR and get it refunded rather than the SSD being 0% for visa holders.

    In any case I am a PR now but still not super interested in investing large sums in HK at this point in time. A bunch of my friends are in negative equity now which is an additional turn-off for me.
    Last edited by aw451; 13-02-2024 at 03:07 PM.

  4. #24

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    Just stating few obvious generally overlooked in financial calculation...

    - Leverage works both ways
    - Life does throw curve balls from time to time forcing unanticipated changes in direction/goal
    - Recency bias works stronger than we think rose-tinting future prospects
    - Market (Property or any) can remain subdued longer than we think
    - Negative cash flow (Rental yield - monthly repayment) for small ticket item vs negative cash flow on life saving is different ball game altogether, much higher idiosyncratic risk
    -Opportunity costs are generally calculated with simple return for back of envelop type ease of calculation, it also produces compounded return like any other investment

    Last edited by ndt; 13-02-2024 at 04:06 PM.

  5. #25

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    Quote Originally Posted by aw451:
    Do you have a link? Last I was aware you have to wait until you become a PR and get it refunded rather than the SSD being 0% for visa holders.
    The refund was introduced in late 2022. The new policy of tax exemption was announced in late 2023:

    https://www.ird.gov.hk/eng/faq/#sp
    Last edited by qhank; 13-02-2024 at 04:43 PM.
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  6. #26

    any general examples of the negative equity situations? Year bought? General location? Purchase price? Current valuation?


  7. #27

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    Quote Originally Posted by becomjapanHK:
    any general examples of the negative equity situations? Year bought? General location? Purchase price? Current valuation?
    Best source is the HKMA bulletin. As per the bulletin, this is affecting high LTV mortgages and the number of negative equity cases is at a 20 year high.

    It's worth noting that the maximum LTV thresholds were increased and stress test requirements were relaxed a year ago to stimulate the housing market so this is not surprising.

    https://www.hkma.gov.hk/eng/news-and...01/20240131-6/
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  8. #28

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    I am sure you shouldn't only compare the amount of rent you are paying, versus the interest cost of mortgage.. you also need to factor in your cost of deposits (say 40-50% of house value) as those can earn risk free 4-5% annually now.

    So if a property cost 10m to buy..
    your total annual cost of holding the property = 10m * 4% = 400k per year (that's what you get putting all 10m in deposit).
    plus the monthly fees.. which i assume would be say 3k p.m. so 36k annually.

    Total cost is 436k p.a. Which works out to a equivalent rental of 36.3k.

    Can you rent a 10m property at 36k/month.. i think you can easily..

    so at this stage i still don't see any benefit in buying versus renting, other than the potential that it can go up substantially in price.


  9. #29

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    To add a somewhat contrarian(?) way of thinking to this thread, the way I look at buying vs renting has always been through the lens of "living forever." What I mean is that flexibility aside, when I consider the long-term implications, it just makes more sense to me to buy rather than rent.

    If I were going to be paying rent for 100 years, I think it would make more sense to try to own something, especially something that could possibly appreciate in value over time. I will not live forever, but I want to have some property to leave to my children.

    Owning a property gives me a sense of stability and the ability to personalize my living space – haha, and given some of my left field ideas, this is quite important as well. It's about more than just having a place to live; it's about creating a legacy and providing for future generations.

    Of course, I understand that everyone's circumstances and resources are different, and renting can offer flexibility, especially in certain situations. But when I think about "living forever," the idea of owning a home resonates with me. Imagine one day not needing to pay rent.


  10. #30

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    Quote Originally Posted by hk.main:
    To add a somewhat contrarian(?) way of thinking to this thread, the way I look at buying vs renting has always been through the lens of "living forever." What I mean is that flexibility aside, when I consider the long-term implications, it just makes more sense to me to buy rather than rent.

    If I were going to be paying rent for 100 years, I think it would make more sense to try to own something, especially something that could possibly appreciate in value over time. I will not live forever, but I want to have some property to leave to my children.

    Owning a property gives me a sense of stability and the ability to personalize my living space – haha, and given some of my left field ideas, this is quite important as well. It's about more than just having a place to live; it's about creating a legacy and providing for future generations.

    Of course, I understand that everyone's circumstances and resources are different, and renting can offer flexibility, especially in certain situations. But when I think about "living forever," the idea of owning a home resonates with me. Imagine one day not needing to pay rent.
    then you are not factoring in the 'lease terms' of any properties in singapore.. remember there are no clear solution when this lease will be extended or not extended by the government, and with 2047 coming along. And the quality of construction in hk means most apartments are pretty much at the end of their road after 40-50 years.. which makes extension of the lease terms pretty much useless ?

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