[Meerkat]

Ok multi-million dollar question (HK at least). What is your view on the direction of the HK property market - the area they call luxury >1000 sq ft?

We are coming to the end of our rental contract and the market place seems amazingly thin on the ground at our current (crazy scary rent). We are considering buying to reduce our exposure to increasing rents, but the price point is so much higher than we would be looking at in the UK. We would be paying less in interest than we are currently paying in rent.

I have to say I do not understand the fundamentals of this market at all so I looking for the opinion of the more long term Hong Kongers.

Cheers

NB staying where we are is not an option

[Boris]

UP.

HK'rs are so different that they will play " chicken " with the rates. Its UP, UP UP until someone blinks. You see it in the office market and in the regular rental market.

Also wealthy HK property owners have a lazy view of the market when on the upside. My wife ( who is an agent ) had a customer with 4 mil in her hand and wanted to buy from a selection of vacant properties advertised. The owners couldn't be bothered to give access or even involve themselves in any negotiation. They where happy to see their property have an increased paper profit. One owner even said " why do you keep phoning me " and switched of the mobile !

Developers will only release some stock to maximise their profits on new build, which, may be a few years old by the time they have leeched out all the units.

There ARE bargains in the market but normally from people who HAVE to sell because of financial difficulties, a property having a fatal fire or a "tragedy" inside.
To get these you need someone who has an inside track.

If your looking to buy then look outside of your " HK experience zone" and travel to places you have never had reason to visit. Spend time investigating and you might suprise yourself. Yes - on the Island or in " front line areas " prices are mind boggling BUT its still half the price ( in Central ) to Central London according to a recent poll. If you come from an urban area then you shouldn't compare some areas to your experience.

HK is much much more that just what you see on postcards !

[KnowItAll]

>> One owner even said " why do you keep phoning me " and
>> switched of the mobile !

Boris - I agree with you, BUT this usually happens when an agent has a bad database. We get called frequently ... even though we've clearly said do not call us. Can turn into a PAIN in the ARSE when agents keep calling you every couple of weeks with "fake buyers" just to test what your limits are. Don't blame just the property owners.

Meerkat - My way of looking at this market, if you can afford it, do it and as long as you can take a hit and won't be on the streets if the market goes down another 10-25%.

By the way, look at the South Side where we're in Pokfulam if you want good deals (not as good as say 5 years ago). These properties are ever green -- as in you'll be able to sell them when you want. Many folks get caught into the cheap is good ... and end up in places like Tung Chung where the will NOT be able to resell now or in the distant future.

Also, take a look at the bird flu situation... if it hits, prices will fall.

[Boris]

KIA - In this case NOT. Property owners were called 24 hrs before to arrange viewing. One answer on the day " look from the outside , I am in Kowloon today ".

I agree about the database problems though AND that well known listing website. Lot of fantasy and dual listings on it.

[freeier]

database problem is because the site autorenew classified unless the agents pull it down from the site.

owners rarely goes thru just 1 agent to transact. my last landlord replicated 27 keys for different housing agents to bring clients to see the house.

[tt2003]

HK locals are looking for very short term profit-- buy today and sell tomorrow and they expect 50% up value in half year time. can the appreciated value cover the mortgage interest cost, or other miscellaneous fee if you hold the property in long term? You pay REAL money to bank for your mortgage interest, appreciated value is just PAPER money (you never know you earn it or not until you SELL). I think it is a bad idea to purchase a property if you cannot liquidate it for quick profits. correct me if i am wrong.

[KnowItAll]

tt2003 : not always true. Depends on the area and the demographics involved. Where we live, the number of transactions is fairly low, as most people have bought to live in. Its the new developments that are problematic (I think... not too sure what the stats are), just like Alibaba IPO ... get a low cost loan (5% down?), and flip in a few months.

[back2HK]

Since Hong Kong's economy is driven by China and the interest rates and currency are pegged to the US - its the best of both situations currently for HK property.

[whong]

Originally Posted by Meerkat

Ok multi-million dollar question (HK at least). What is your view on the direction of the HK property market - the area they call luxury >1000 sq ft?

We are coming to the end of our rental contract and the market place seems amazingly thin on the ground at our current (crazy scary rent). We are considering buying to reduce our exposure to increasing rents, but the price point is so much higher than we would be looking at in the UK. We would be paying less in interest than we are currently paying in rent.

I have to say I do not understand the fundamentals of this market at all so I looking for the opinion of the more long term Hong Kongers.

Cheers

NB staying where we are is not an option

it really depends on how you value the property now. if you use 1997 index as a starting point, the upside for property bull run is still there. if you use 2003 index, property value has gone up from 100% to 300% -- depends on the areas.
beside, Hong Kong real estate has no fundamental we can measure... you can be bullish.. you can be bearish... hard to tell..

My 2 cents, try to find something that are highly tradable within your budget. back to square one, investments always involve risks... good luck!!!

[Meerkat]

thanks all.. do appreciate your time and comments. I am looking for a place that feels like a home as well as (I hope) a good investment. There is a lack of decent prospects on the market at the moment so I hope it picks up after CNY.

I have to say I feel like a first time buyer again, whereas in the UK I was half way up the ladder.

Wish me good fortune