Good time to buy ?



ORIGINAL POST
Posted by sidsingh 17 yrs ago
With an imminent rent increase, i am actively looking to lower my rental expense by converting it into interest expense.


I am looking at taikoo shing or discovery bay. Is this a good time to buy or have prices peaked plus whatever thats going on in the US sub prime housing market.


I am just concerned that if i were to move elsewhere, my property asset should be able to match the outstanding principle of the mortage ( should be positive net worth in a crude sort of way!)


I have brokers telling me that another 5 to 10% appreciation is expected in HK

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COMMENTS
kalvin 17 yrs ago
don't understand what you mean by "my property asset should be able to match the outstanding principle of the mortage"


as far as has prices peaked, well, you yourself said rents are going up. rents are closely correlated with prices. in fact, my observation is that price growth tend to lag rent growth. ie: it takes a bit of rental increase before people realize "crap, it really isn't worth it to pay rent anymore"

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sidsingh 17 yrs ago
Kalvin,


Thanks. What I mean is that say I have to leave hong kong after two years, i will need to sell my property. So if i get 100 bucks from the sale but the outstanding principal on the property is 105 then I am out of money. This situation might arise if the property prices go down ( either cyclical or maybe due a catalyst such as the US sub prime market).


So I am wondering what is the confidence level of other people on this forum on property prices.


I know of rents increasing only in Taikoo Shing - how about other major developments ?

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kalvin 17 yrs ago
ic, so basically you were asking if people thought prices are going up or going down....my IQ is quite low so didn't understand at first. i think the general consensus is that prices are going up just like rents are. i just wrote something regarding subprime in another thread. welcome to read. of course these are just my personal thoughts but what do i know...again, i have low IQ.


fyi, rents are indeed going up, not just in taikoo shing. the finance industry and other related industries are importing so many people from America/Australia/China every year. unlike locally bred people, who can live at home, these expats all need a place to live.


so like i said in another thread, only thing that would affect hk property is if the finance industry all of a sudden tanks in hk and that would only happen if china's economy tanks. the link between HK and US is weakening by the day. in fact, there is a small possibility that HKD will end its peg with USD in the next decade. if that day comes, trust me, you'll feel like you won the lottery (if you own any HKD assets, incl property).

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sidsingh 17 yrs ago
Kalvin,


Interesting point on the currency peg - most people it's unlikely to happen - well not until the chinese currency get deregulated. But yes, it does make sense to have fixed deposits in rmb rather than hkd as the former is expected to appreciate gradually over the next few years.


Walkup - thanks for your comments, i am ready for the hassle of buying & selling , as there no immediate exit plans - will keep fingers crossed !!



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Havefaith 17 yrs ago
Rents across the board are increasing. My friend is renting in Kennedy Town - and her rent has just increased by more than 60%.

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fel 17 yrs ago
interesting topic....we have been here for a year and also been wondering if we shd continue to pay rent expense or better off mortgage interest expense???? We also have no exit plan at the moment, might be in hk longer than we planned. Just wondering how guys finally decide to buy rather than continue renting? What are the push factors, mainly rent increase?

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jeffreykhl 17 yrs ago
how much do u think i should have in the bank to be able to consider buying a flat?

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kalvin 17 yrs ago
agree with walkup, if you plan on leaving in less than 2 years, it's NOT worth it to buy. stamp duty, tax, agency fee x2, legal fee x2, interest....all of that would require a lot of capital appreciation before you break even and 2 years might not be long enough. but i would say that for people who plan on being here for a while, you must own at least your own place of residence. it's really the only hedge against inflation.

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