[RastaMan]

Isn't it cheaper to rent than to buy? According to my agent's and myself's calculations, the mortgage you have to pay to the bank might actually be higher than the rent you are paying on the same flat. The only reason people buy is to speculate that the price will go up, which might or might not going to happen. At at the end of the day, if you buy bonds or something you are also going to get more money. So in my opinion it's better to pay rent and buy bonds with your savings.

But then, I don't have O leve maths, so...

[sunniefaith]

I think it is cheaper to rent unless you're going to be here for more than 5 yrs. I was looking through my lease and some papers, I realised that I'm only paying a third of what my landlord is paying. (Monthly installments to bank, government fees, management fees and everything in). So in other words, my rent is not even enough to cover his investment, he has to put more in.

[RastaMan]

Originally Posted by sunniefaith

I think it is cheaper to rent unless you're going to be here for more than 5 yrs. I was looking through my lease and some papers, I realised that I'm only paying a third of what my landlord is paying. (Monthly installments to bank, government fees, management fees and everything in). So in other words, my rent is not even enough to cover his investment, he has to put more in.

Exactly.

So why you say that if you stay more than 5 years it is worth it to buy?? Because you assume that the price of the flat is going up and you can sell?

[sunniefaith]

Originally Posted by RastaMan

Exactly.

So why you say that if you stay more than 5 years it is worth it to buy?? Because you assume that the price of the flat is going up and you can sell?

Something like that, I guess, if you're really here for long term as in like 5 to 20 years (but then again, who can ever tell the future) then buying might be a good thing as it can be an asset. But then again, who can tell with property market, when you're talking about HK when prices goes up and down

[coolgirl]

Originally Posted by sunniefaith

I think it is cheaper to rent unless you're going to be here for more than 5 yrs. I was looking through my lease and some papers, I realised that I'm only paying a third of what my landlord is paying. (Monthly installments to bank, government fees, management fees and everything in). So in other words, my rent is not even enough to cover his investment, he has to put more in.

how many years is your landlord paying for his mortgage. I calculated, if it's 20 years, and excluding the 30% downpayment, you're practically paying the rent.

[sunniefaith]

Have no clue how long is he going to be paying for his mortgage.

[coolgirl]

Originally Posted by sunniefaith

Have no clue how long is he going to be paying for his mortgage.

If he has a five-year term, then it's just logical that his monthly amortization is three times the rent...

[sunniefaith]

Originally Posted by coolgirl

If he has a five-year term, then it's just logical that his monthly amortization is three times the rent...

Honestly, I doubt that it's a 5 yr plan. He's paying about 16 k for the mortgage and that doesn't include the rest of govt and management fees and stuff like that, 16 k X 60 = 960,000. Think a 2 bedder on Park Island is more than 2 million.

[freeier]

if u are very cash rich, then buy a property makes sense because you are getting 3% interest rate on your cash and u can get 3% actual rental yield on your property (even if you stay yourself, look at it from a rent to yourself at market rate view).

if u are going to take a loan, then renting makes sense, unless your view is that property price has more than 66% chance of going up within the next 2 years. any other chances, it'd make sense to wait for the window then buy.

remember, in buying, u are not getting an option for the upside of the house price, u are just hitching yourself into a contract where if it goes up u win, if it comes down u lose, and u are paying for that option through your interest paid, agent fees, etc.etc.

also to note, all properties in hk has a limited holding period up to 2047 (50 years after 1997 handover).
practically, everyone thinks that chinese govt is not going to change much of the legistration, but technically they can change and void all commercial contracts previously signed (right ?).
so as u go on, in 15years time, banks are not going to offer loans for properties unless the chinese govt says they will extend the lease period of all properties. it might be a tricky situation but now everyone is pretending the problem doesn't exist (esp those with a property or have interest in property).

my view is, unless the communist govt comes out and officially state the rules after 47, banks are going to give lower and lower loan quantum and shorter and shorter duration, this will have a bad effect on overall property price over long term. someone wld pressure the govt in china to do something, but they would not want too much of a wealth disparity in hk and they might use this oppt to let the property market correct somewhat.

all my speculation..

[RastaMan]

Thanks freeier. Interesting thaughts.

Originally Posted by coolgirl

how many years is your landlord paying for his mortgage. I calculated, if it's 20 years, and excluding the 30% downpayment, you're practically paying the rent.

But a 20 years old property in HK is not worth much. Right? There seems to be quite a lot of depreciation in properties here. For some reason, everybody wants a new one. And the climate doesn't help.