Posted by
profused
12 yrs ago
I recently sold my property and made a profit of HK$1.3M, I now plan to either rent a place for the time being until the property prices go down so i can get a bigger place or to buy now itself.
What are people's opinion on what is the best decision?
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How long are you willing to wait?
I think we may see another rally from a low sometime this year - But I cannot prove that.
Have you thought of Downsizing, and buying something smaller and cheaper than you owned before - let's say, something costing under $3 million.
Then you will not just run through your cash pile paying rent.
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Without a crystal ball, there is no right answer to this question.
That said, if your objective in selling is to be able to move into a bigger unit (rather than just being purely a financial decision) and you intend to be in HK long term, I would get out there and start looking a places in your price range/size range/area (assuming you haven't already). Once you see what is potentially available you wil be in a better position to make a decision.
FWIW, I think (at least I hope) that the increased supply of new units from developers will provide better buying opportunities in both the primary and the secondary market later in the year but who knows?
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I believe there are some opportunities, from people who want to sell in a rush, either because they need cash, or because they think prices will crash. These opportunities are few, but they are there. So I suggest go house hunting, and if you see something nice for a nice price, go for it. If not, wait, perhaps 6 months, 1 year, 2 years...
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What was your plan before you sold your flat? Was that your only HK property? If so, now that you've sold and realized your gains, what next? and what was your plan before you sold? Maybe answers to these questions can guide other readers to offer specific suggestions?
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Owner-occupied property gains are somewhat illusory because every other property has increased in price lockstep with your home. When you sell and start looking for a new home you realize that everything costs more by the amount of gain you earned... hence there was not really any gain at all.
The ways to "lock in" your gain are to:
- Downsize to a smaller, cheaper home
- Move to a more distant area where prices are lower (for example, old home on HKI so move to NT)
- Rent a new home
- Move to a new country
I personally think that property prices in Hong Kong should and will have a significant decrease. However, that is anything but certain to happen. If you are someone who lives and works here for the long term then I would probably do option 1 or option 2, with preference to option 2 (move to a more distant location where prices are lower).
OTP is a fan of TKT and I can see why. There are also many places in NT that are worth examining.
Or buy a home at Sea Ranch~
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Thanks for all the suggestions.
Punter, i bought this house because we were expecting our first child and wanted to have a stable house. At that time, it was lot cheaper (in 2011). I didnt really buy the property for any investment/capital gain but given that I had the chance to make some money that I wouldnt be able to do so even if I work for another 10 years, i decided to sell it. I wouldnt want to buy it at this moment since I know it is expensive so I want to wait till the prices go down. In the meantime, i can definately cover the rent with my salary and keep the profit in a bank with higher deposit rates.
My husband wants to move to Canada and he might move first. Given this, i do not want to get stuck in a property and not able to sell/rent it for few years.
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In my view, you've taken an investment position (i.e. Cash instead of Property). It's like you're shorting the HK property market betting it's going down.
The question from your original post is much clearer. The question now is, what to do with your cash. There were was a thread titled "if you have 3M in cash, what will you do with it" or something to that effect. You can look it up and see if you like some of the suggestions given.
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Thanks for the explanation.
Given your priorities, I would say the HK market is too risky for you.
With the new taxes, it is highly illiquid, especially in the first 2-3 years,a nd so there's too high a risk you will get stuck in an Illiquid Investment.
As an alternative, you might want to wait for a dip in HK Property shares, and invest 10-20% of your cash in those. They are more liquid, and you can hold if you have to move in a hurry, and then sell later (from a distance) when you feel the time is right.
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