Originally Posted by
Flex88
In the paper the last few days for all those thinking about buying/renting..
US interest rates now on the way up.
What this means.
1. Mortgage payments in HK are going up...
2. Those who own (landlords) are going to have higher mortgage payments therefore rents will go up proportionately..
3. If the rates go high enough to the point where you can no longer make payments, you default and loose your shoe box (and your parents shoe box re the one above who mortgaged his parents appt to get down payment)..
OR
If interest rates go high enough - a property crash where you wake up and your shoe box has lost 50% of its value BUT your mortgage has NOT...
This has happened in HK - Caveat Emptor
The only bit I disagree with is that landlords will put their rents up due higher mortgage costs. Rents aren't set by 'cost plus' they are set by "how much can I get". If HK landlords think they can get more money, regardless of if they have a mortgage on the rental property or not, they will put the rent up.
Same was seen in UK when the govt increased the taxes/ decreased the tax advantages for landlords. Landlords all claimed they would need to put their rents up due to the higher costs, but it didn't happen - rents in many places have gone down - as it is supply/ demand that determines rents. not cost