HONG KONG PEOPLE raced to search for “stamp duty” on Google within minutes of Wednesday’s government pledge to make home-buyer easier and cheaper.
But at the exact same time, people selling their apartments raced to raise their prices.
Ultimately, the changes brought a lot of energy back into the housing market—expect some hard bargaining to follow.
PRICES HAVE FALLEN? KIND OF
The conventional belief is that prices have tumbled in Hong Kong’s property sector. But that’s like saying that prices which were wildly wildly wildly excessive are now just wildly wildly excessive.
So they’re still not cheap by any measure. But given the high rents in Hong Kong, it is almost always better to own the place in which you live.
GETTING ON THE LADDER
Here’s the new deal. The revised rules mean you can get 70 per cent of the value of a flat as a bank loan.
So if you’re a first time homebuyer and want to buy a HK$5 million apartment, you’ll need HK$1.5 million in cash (US$190,000).
Typical case: Ming and Jason have been together for four years. They earn HK$490,000 a year each, but have been living off one salary while saving the other. This gives them almost HK$2 million in savings – enough to get onto the housing ladder.
Once they buy the flat, their monthly payments are lower than their rent was, and they feel more secure.
A look at past decades (not just recent years, but past decades) indicates that Hong Kong property rises in the long term: most of the time it creeps upwards or jumps up, and occasionally pauses for breath.
The so-called slump of recent years is really just a period of prices moving in a narrow band.
Still, the future remains uncertain – with various western powers anxious to hit Hong Kong with sanctions. So we can’t expect an easy climb in months to come.
Yet ultimately, people buy apartments for a number of reasons, and capital appreciation is just one of them. Having your own home is often a major psychological step that people have to take as they find their place in the world.
And that’s more important than the ups and downs of the property market. “Ultimately,” says one buyer. “The statistics in the property market are only of interest on two days of your life. The day you buy your apartment and the day you sell it.”
Image at the top by Jimmy Chan/ Pexels