Posted by
rs2000
12 yrs ago
HI All,
We have been living in HK for 4 years now and I have barely saved enough to buy an apartment I think. I want to be able to buy a home wherein we can live comfortablyy with 3 kids. we live in tung chung and we like the area. i want to buy here (and even it is more than my budget)
caribbean coast (CC), seaview crescent(svc), coastal skyline........
My problem is that with a family of 2 Adults and 3 kids, we really need the bigger apartments available (1250+ in CC, 1202 or 1175 in Coastal skyline, or 1124 in SVC).
we lived for 2 years in 1175 in coastal skyline and now in 1124 svc (and i really wish this apartment was a little bigger and more opne liek 1222 in coastal skyline or 1258 in cc, although we dont like dogs/pets).
Now the problem, is that I can just pay upto 1M hk$ for downpayment including the stamp duty etc and do not want the monthly payments to be more than 20k Hk4 inc. management fees.
I have done some maths and my upper budget is around 5.5M$. Now the above apartment that I like range from 6 to 6.5+ M.
Can you please share your views on whether you would expect the market to fall so that the above apartments can go for 5-5.5 M? (1258 in CC, 1202 in Tower1,2 in Coastal skyline (I love this one), 1175 in coastal)
I can obviously wait for the market to drop, (10-20%) but obviously it can go up too. so please share your views.
Many Thanks!
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You computed to borrow 90% of the property value that is why you said your objective is to buy something in the range of 5.5 to 6M (that you can afford). That's a lot of borrowed money, and as Lanny mentioned what's going to happen to you once the interest rate goes up to very high levels? You should project to be able to repay your mortgage with interest rates up to 8 or even 10%. With a 20k cap on monthly mortgage payments capability, your situation doesn't seem to be ok.
Having 3 kids in HK is difficult. Ideally, each kid should have his/her own room but your budget is holding you back.
Personally, I wouldn't get that much debt at this time. But then again, it's your call.
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thanks all!
you raised good points....
it seems that in order for my investment to be safe (atleats in tung chung), i need to make a 30% down payment 6-6.5 million ~ 2m us$
this means another many years of wait (5-6)....now the problem is that I then might miss the opportunity (if there is any) and the prices might shoot up
with the third runway and the macau bridge, i think demand for tung chung might increase.........
shall I buy a 2 bedroom apartment instead (3.5-4 M us$) in order to atleast get onto the investment buzz...the problem is that we will continue to be living on rental and cant really modify the apartment as we like....alost the rental increase...LL selling the apartment etc
do you think i should wait another 3-4 years to potentially gather some monay (i am not sure if wi ill be able to gather another 1M) and then buy 3 BR or shall I buy a 2 BR apartment and give it on rent? my calcs say that if interest rate go upto 4 %, my mortgage will require me to pay 2k/month over the current rents (which is not too bad).......
suggestions please....
many thanks
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RS, that's an investment call that you yourself need to make. As you yourself also pointed out, the market can go either way (up/down). You're afraid that prices might shoot up and you'll miss the investment gains. On the other hand, prices might also go down and you may be able to use the current cash you have to buy the flat you want. It's your call and you'll only see whether you made the right one afterwards.
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oh ok
so if I buy for investment purpose, bank would lends me 80 (or 70%)%?
walkup3, you are absolutely right. I have never thought to porperty market more than what I do here in HK. newspaper, colleagues. friends...all seem to tlk about apartments..etc etc etc
some have made 100% return on investment a few years back
apart from this, i also feel that now its the time I should live in the home I own but ALAS...its HK...and its seems impossible.
now that led me to think that a,teast I get a 2 BR aand rent it
...........
and I know its an investment decision. what do you guys think about the proprty priices in 2 years. i think a china slowdown is likely but that said, the influx of $ will keep coming here.....
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If the property you're buying is for personal use, you can borrow up to 70% from the bank (normally. If you want to go up to 90%, you have to go through HKMA but you need to pay more and higher interest rates too.). If you rent it out, the bank will only lend you 50%.
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If you tell the bank it's for personal use and then you rent it out, it will be found out later on, and they'll kill you with penalty payments.
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"If you tell the bank it's for personal use and then you rent it out, it will be found out later on, and they'll kill you with penalty payments."
Punter,
Can you give us a specific example of how this happens?
How long do you have to live in a place before you could rent it out?
I guess you would have to notify your bank for the change, but i wonder if anyone can be more specific into how they would catch you?
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When you're caught, first they will ask you to come up with the 20% difference in amount that they let you borrow of which you we're not supposed to be entitled.
How they do it, I don't know. But they do. Obviously you can take your chances you're not going to be caught.
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thanks
after much thinking..i think buying as cheaper apartment and then renting it out might be a better idea (considering the affordability). Here in Tung Chung, 2BR 580-700 sqft apartment go from 3.5 to 3.8 M . and uusually rent for around 11-12k
Now considering this, would you suggest buying in a relaivelt new buildign with club house etc at tung chung or would you buy somewhere in HK island ina older building and smaller size.
since its for an investment, pelase give your views on which might be better.
TC goes for around 5200/sqft. the tird runway and macau brdge might come up and increas ethe demand in 5 + years, however the prices seem to be increased and some fo this is already attributed to the above potential developments.
how would you compare this to an older buidlg 300-400 sqft apartment in central etc...........
thanks for your help!
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If you can afford it, always buy in a good central area.
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yeah but budget is the same. its vs. newer 700 sqft (with clubhouse) in tung chung vs. 300-400 sqft old bulding in central. I cant afford >3.8 ish M us$
Thanks!
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Location trumps everything else.
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Have you tried looking at Village Houses?
You migfht be able to get something larger witjin your budget. I have an agent friend who specialises in Village House in Tung Chung, and would be happy to give you his phone number. If interested, send me a message.
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BTW, Tung Chung MIGHT benefit from the aggressive hiring program that Cathay has launched and also the hospital which is being built.
Dont listen to those conventionally-minded folks who think you have to buy near Central. Tung Chung has been a better investment for some time, and it is an improving area, while areas near Central are just getting more crowded and less livable. I know TC well, and used to own multiple flats there. I wish now I had held on longer, as I had analysed the market well a few years ago, and was right that it was undervalued.
See also the thread here on Mid-Levels, and draw your own conclusions.
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i really want to wait and buy after correction for myself. I would LOVE !!! to do that
but my friends & people have been tellign me that transactions have picked up in last 1-2 months. TC has seen a lot of transctions and pricing arent decreasing
i fear i would miss this and prices would rise further to make it completely unaffordable for me.
if you see my thread. i want to buy for myself but want >1100 sqft and it cost 6-6.5M while I cant afford >4 or max. 5M.
yeah they have hospitlas coming up, 3rd runway too (+ves) but then some new publuic housing right at seafront and blocking views for many in TC (-ves)...
i thought i can jump onto the ride and take atleast a smaller apartment now so that atleast I can get something back if markets goes up
confused.....
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If you're quite positive that prices are going up, then buy. Nobody can be sure where the market is heading, you know. What people in this thread are saying is, buy, but be ready if you encounter problems down the road (when your projection turns out to be wrong). If you indeed buy now and prices go up, you'll be a happy man. Two sides of the coin...
On the other hand, you can play neutral and just be happy with what you have in the bank. (But then again, even that has inflation as enemy).
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There are some blocks of small flats standing between the AIA building in Electric Road, Tin Hau and the Grand Harbour View hotel. I think the development is called Wang Fai mansion on Wang On Road. Anyway, it stands next to the Oil Street depot which is being redeveloped by Li Ka-shing and is about 2 minutes from Fortress Hill MTR. The flats are small but I think you can still get something for under 4m. The area is on the up, there are loads of restaurants and it is very convenient for transport. For the sake of transparency, I don't own or have any interest in a flat there but I know someone who does.
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Lanny. Maybe but you need a roof over your head. Renting is very difficult when you have kids - especially if you have a contract that is increased annually. You constantly have to uproot which is not good for the family. Also, with inflation it might be a good time to buy. Like I said, my dad bought our house in the UK in the 1970s for 15,000 punds (now worth over 200,000). What would have happened if he had put the money aside for my education? It would have been worthless. To be honest, if I were Rs2000 I would probably take the risk and gamble my savings. I can't see prices falling unless we have a major crisis in China.
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Hugie
12 yrs ago
A mate of mine told me when i was looking to buy......just buy something you can afford. I listened to him and moved out in the sticks where no sod lives! Best move ever. Mortgage just HK$5890. Only put down HK680,000. Buy, by all means, just don't burden yourself.
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It is the wrong time in the Property cycle to be an aggressive debt-fueled buyer
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