what to expect in housing

[mpflis]

I was hoping someone could give me some insight on the housing market in HK right now. I will hopefully be starting aug-sept this year and we are trying to make plans on what to expect in terms of purchasing an apartment, or deciding to rent. Is there a minimum down payment required in Hong Kong. For example, if we try to purchase a 8 million HK dollar flat, will we be looking at 20% down, or is it possible to buy with less up front? I know at 50% of 35000/76.1 of the RFZ as a SO, we will be looking at a substantial struggle for the first 2 years; however, if prices are continually declining, it might be prudent to squeak by and then be comfortable by year 3. Is it possible to acquire a secondary loan from a local HK bank as a new employee at Cathay? Any current SO's that have recently gone through this predicament, your input would be greatly appreciated! I am also clueless on where to find the current HK index. What are some of the more popular places to live. Im coming over with my wife and 3 yr old son. Any suggestions and examples would be very helpful. thanks in advance. cheers

[betaboy]

The HK housing index is at www.rvd.gov.hk/en/doc/statistics/rvd1_2.pdf .

Applying the CX formula gives you about $23k/mo these days, which is more than enough to rent a nice 3 bedroom flat in Discovery Bay, but low if you plan on living in the more trendy areas of the island. DB is easily the easiest place for an expat couple with kids to live, but like anywhere else in HK, it has its pros and cons. Have a look at: www.geoexpat.com and www.dbfleamarket.com for more background.

In general, you'll be able to afford a nicer place to rent than you could buy, since if you buy, you'll be liable for a myriad of other expenses, such as maintenance and various taxes.

Just as in North America, you can get away with a high ratio mortgage (5% down) but you will be liable for additional insurance fees for the bank.

The housing market is in somewhat of a decline right now, with US interest rates on the rise, so we decided to hold off on a purchase. Most leases are 2 years, but both landlord and tenant have the option to withdraw after a year under current rules.

For a good overview of what the money can get you, have a look at:
http://www.gohome.com.hk/english/

[petitfromage]

Other useful renting.buying websites are:

General:
www.asiaxpat.com.hk

Soho, Mid-Levels
http://www.sohoflat.com.hk/eg_version/index.htm

HK Island
http://www.landmarkasia.com.hk/
http://www.habitat-property.com/
http://www.statelyhome.com.hk/

Sai Kung
http://www.epdc.com.hk/1english-main.htm

South Lantau
http://www.findleyleung.com.hk/profile.php

That should keep you busy until you join and then for the next 25yrs too!

Just to back up betaboys good advice.......'most' people at CX are sitting tight at the moment.
The property market boomed after SARs and seems to be making a long overdue correction (but its HK, it could boom again next week without warning).

Banks and particularly developers are starting to lower mortgage rates and offer significant incentives.
After SARs, you could buy a place for 0% deposit and they would give you 7% cash-back!
I dont think we'll see that until bird flu hits!!!! And that is another reason people arent buying now!

The standard HK rental agreement is 2yrs, but after 1yr you can break the agreement with 2mths notice.

My advice to you, is to rent when you 1st arrive. 14mths is about the right amount of time to get the lie of the land in terms of location, price, air quality and access to work etc.

Cant help you with Discovery Bay. I wouldnt go there if it had the last porcelain toilet in the world and Id just done a 76hr Delhi trip!