[goleoboy]

Hi there, we are comtemplating buying an apartment vs. renting upon our move to HK in August. Is it a sellers or buyers market these days? What is the average for a 1000 (livable) sq ft apt in New Territories?

Also what is the usual % requirement for down payment? Please any input on propoerty purchase would be helpful!!

[Pekkerhead]

This will be a very big flat in HK and therefore will cost a lot. I live in a 10 year old apartment complex in Tai Po (pool, gym, recreational facilities etc) and I have seen 1000sq ft (and we are talking gross floor size, not net size) flats go here for anything from 3.5 to 5 million (depending on their condition and aspect).

[PDLM]

The base for mortgages is 70% of the property value, although you can get up to 95% if you purchase mortgage insurance (this takes a few weeks to get set up).

Normal payments are 5% on signing the preliminary agreement, 5% more (plus stamp duty, which varies, but say 3%) on signing the formal agreement, and the rest on completion, which will be about 4 weeks later.

Getting a decent mortgage may be a bit harder if you are fresh off the boat and don't have a financial track record in HK. As a guide, I have just signed up for a 70% mortgage (of HK$3.5M) with HSBC where the effective rates are P-4 for the first year, P-3 for the second, and P-2.88 thereafter. Where P is HSBC's Prime lending rate (currently 7.75%).

[goleoboy]

thanks guys, what kind of financial history do they reference? credit history in HK? i've had a bank acct in hK which my parents manage. also it sounds like down payment will be around 30 percent? that's huge compared to what they require in the states. I heard from somewhere that if you buy brand new apt it's only about 10 percent down... is that true?

[KnowItAll]

You can get the down payment down to 5% on new apartments.... however, you'll be paying a higher interest to the developer and their private financer for the 25% which bridges the 30% requirement from the bank.

[PDLM]

In general there are also some limits on what the lender will accept as the maximum proportion of your salary that the interest payments can be, although this is obviously negotiable if you have substantial assets or other income.

[goleoboy]

Thanks guys, you guys are a great help. We are comtemplating - don't want to buy in a sellers mkt. Planned to spend about 20k/mo on rent - just thinking it may be easier to plop down a year's rent (or 6 months) at a time then don't worry about it -- wait for the mkt to slow (or at least be more familiar with it first) before diving in. Thanks guys!