Buy a flat, stay in HK.
Posted by jobin (1615 days ago)
I found a great small flat to buy but i have no HK ID. Am in HK on a tourist 'visa' carrying a USA passport. If i can put up 50% of the 1.6 mil HKD, will some local bank loan me the balance of the money? Must i do some kind of deal to own property here if no ID or work visa? Is there some way to live here long term if not on a work visa? OK, i know about marriage; it's possible. Other ideas? I don't have more than 1 mil USD, so that is also out. thanks
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Posted by PizzaAce (1612 days ago)
Why would a bank lend you 50% if you have no collateral to offer?
What is the address of this flat in Hong Kong you want to buy?
Posted by Loyd Grossman is Miss Venezuela (1612 days ago)
There are no restrictions on foreigners buying flats in HK so you don't need to be a resident. If I were you, I would get my financing sorted out before buyinh. A big international bank like HSBC or Citibank might lend you the money if you have an income source or some other assets overseas - especially if you intend to put down a large deposit. However, it won't be straightforward. As for staying in HK permanently, you need to either a) get married b) have HK$7m approx or c) set up a business with solid cash-flow and probably offering local employment (all of which must be audited). For the latter to happen, you'll probably need about HK$7m just to get a local busienss off the ground as HK is very expensive when it comes to rent.
Posted by ecareken (1612 days ago)
LGMV is right as most anyone can buy a flat in HK, one does not need a work visa to do that. But to get residency you would need to up the ante to a minimum of HK$6.5M see The Capital Investment Entrant Scheme (CIES) http://www.cies.hk/ Though I have had friends purchasing and renting HK properties in the past that have just gone border hopping or a week here or there in Asia keeping there properties here for many years
Posted by walkup2 (1611 days ago)
jobin, there is absolutely no problem for getting a loan from a local bank and no special 'deal' required. However, you do need documentation from your home country to validate your existence.
Proof of residence: 3 months of recent utliity bills.
Employment: Last annual tax return, 3 months of salary slips, official letter from your employer stating your employment and salary
Finance: 3 months bank statements showing both salary and committed outgoings.
Each bank may vary the above, but the bottom line is that you will have to return home to organise the documentation.
You might want to put down the 10% deposit and ask for an extended completion to allow for both organisation of documentation and sending of some funds, but there is an element of risk involved.
Posted by PizzaAce (1609 days ago)
@walkup2. Rubbish. See jobin's post 2 days ago on a different thread where he actually did go into a local bank.
There IS a problem getting a loan from a local bank. And think of it from the bank's perspective, you are very high risk and have no ties to Hong Kong. How can the local bank verify the overseas evidence. Your foreign statements could be forged and there's no way the bank would know.
There's nothing stopping you from coniving with the vendor to rip off the bank. The vendor gets paid an overinflated price, and the purchaser just disappears without a trace when the vendor is paid. The bank realises later it can't sell the property to recover the loan when the purchaser defaults.
Posted by Loyd Grossman is Miss Venezuela (1609 days ago)
Pizzace. Up to a point. But the bank will value a property before lending so an overinflated price is not that easy to stick on a bank. If the flat is in a mainstream development which is easy to value and the buyer puts down 50-60%, then the risk is quite low. I doubt the bank would entertain lending for a village house or something that is difficult to value.
Posted by PizzaAce (1609 days ago)
A nice little scam would involve a valuer working for the bank who gets a cut from the vendor. This is assuming in fact HK banks are stupid enough to lend to a foreigner who has no HKID and no ties/assets in Hong Kong.
Posted by walkup2 (1609 days ago)
Sorry PizzaAce but I am speaking from experience of having carried out a purchase this way. Banks are more than able to ascertain genuine documentation. I do admit however that I was introduced to the bank by an existing customer rather than just walking in off the street.
Posted by Loyd Grossman is Miss Venezuela (1608 days ago)
Pizzaace. Maybe. But instant home valuations are available on the internet these days as both HSBC and Hang Seng Bank.
Posted by walkup2 (1608 days ago)
What Jobin might want to do if he has no network in Hong Kong is contact one of the HK mortgage brokers who should be able to guide him. Having an overseas HSBC bank account would also be an added 'assist'.
Posted by OffThePeak (1583 days ago)
I have bought several flats that way, but I will warn you that HK-based banks like to see HK-sourced income. So you may need to show them that. Perhaps you can "pay yourself" a property management fee, or something, and have that flow through your HK account. That might then be used as the basis for a 50% loan.
Above 50% LTV it may be difficult. I have done 60% and a bit higher, but that was in 2007-8. It may be more difficult now
Posted by tristan1970 (1581 days ago)
I did purchase 3 apartments in Hong Kong, all in 2003, so i did very well. I rented 2 and live in one. Thankfully i have just sold 2 for over 160% profit. My third is now up for sale and i have had 3 offers. So far the third is $400'000 more than the asking price. This is only a $6'000'000 apartment. The guy that is buying is adding to his portfolio of 4 flats all acquired in the last year. His rental yield on this flat of 3%. He has a mortgage agreed of 80% at an interest rate of 1% from HSBC.
This is ridiculous what is he thinking, if all his properties are based on this formula then as soon as the interest rates rise as they will he is in serious trouble.
You cant rely on China there bubble is coming, The USA and EU will be pushing for the RMB to be revalued, if China dose not comply we will see import duties rise on China made products. This and the slow down in the USA is going to stem the flow of Chinese made products, and in turn stem the flow of Money from the mainland.
I saw the crash in the USA and sold my properties maybe 1 year too early but here? I think not.
Just look out at night see the amount of properties terribly designed and built. The Hong Kong property market is controlled by 6 or 7 greedy developers and kept artificially high by the HK government. Take a walk and see how many shops are empty this is unpresentated.
You mention luxury what living in Park view in a 2000 sq ft apartment overlooking a polluted mess. Hong Kong is Ugly, Dirty and getting more polluted.
Enough is enough im getting my kids out of this they have ben here for 9 years thankfully no respitory issue. unlike lots of his friends!!
Good luck im not preying for a crash i have seen all these signs before... My feeling is its coming!!!!
Posted by Ted the Angry American (1581 days ago)
You seem to miss the point that the people who drive the property market don't care about how ugly, dirty, polluted, or poorly-designed HK is.
Posted by ArtfulDodger (1581 days ago)
Ted is right. If tristan1970 hates HK so much, then go back to the US. Enjoy paying those high taxes and using inefficient public transport (assuming you're not moving to NYC).