Buying in HK
Thread Starter
Join Date: May 2005
Location: England
Posts: 8
Likes: 0
Received 0 Likes
on
0 Posts
Buying in HK
Hi Guys
I am starting as an S/O with Cathay in the next few months and would like to get some advice on what property I will be able to buy with the housing allowance.
My Wife has decided on DB so thats the first problem solved. What I would like to know is how much deposit I would need etc to be able to buy and how far the housing allowance would go to cover monthly payments, we would ideally like a 3 bedroom place but would be happy with 2 until the allowance goes up, is this realistic? Or should I wait until I get my F/O allowance?
I am coming from the UK where property is already very expensive so I will have a sizeable deposit if needed. Any constructive advice would be much appreciated and can we please try and keep this on subject. I am really looking forward to starting so please no warnings on dont do it etc etc...
Cheers
I am starting as an S/O with Cathay in the next few months and would like to get some advice on what property I will be able to buy with the housing allowance.
My Wife has decided on DB so thats the first problem solved. What I would like to know is how much deposit I would need etc to be able to buy and how far the housing allowance would go to cover monthly payments, we would ideally like a 3 bedroom place but would be happy with 2 until the allowance goes up, is this realistic? Or should I wait until I get my F/O allowance?
I am coming from the UK where property is already very expensive so I will have a sizeable deposit if needed. Any constructive advice would be much appreciated and can we please try and keep this on subject. I am really looking forward to starting so please no warnings on dont do it etc etc...
Cheers
Join Date: Feb 2004
Location: suitcase
Posts: 169
Likes: 0
Received 0 Likes
on
0 Posts
I'm KA but if I remember correctly you will get 24k the first 2 years and then doubles to 48k.. Not sure if this is the rent/buy package though or just rent BUT..
To buy the bank (any bank really) will give you 70% of the valuation price. No they won'tcome see the place they'll just look into their system so do not pay over the top for fancy renovations cos the bank will NOT cover it. If you want to go higher than 70% the remaining bit, up to 95% will come from the HKMC (Hong Kong Mortgage Cooperation). This takes a bit of time but usually is no problem unless the building is older than (Ithink) 20 odd years or it's a village house. So all in all you pay 5%, stamp duty and 1% to the estate agent in comission although I think CX has a deal to half this (believe it's savills)
All in all.... Well worth it if you intend to stay long time BUT don't go overboard with the first mortgage AND don't rush into things..
Many of your 'future' colleagues have done the house buying bit many times before so if you listen you should be able to avoid the pitfalls and there are many...
Cheers, wellcome to Honkers...
PS. DB.................. You sure????????
To buy the bank (any bank really) will give you 70% of the valuation price. No they won'tcome see the place they'll just look into their system so do not pay over the top for fancy renovations cos the bank will NOT cover it. If you want to go higher than 70% the remaining bit, up to 95% will come from the HKMC (Hong Kong Mortgage Cooperation). This takes a bit of time but usually is no problem unless the building is older than (Ithink) 20 odd years or it's a village house. So all in all you pay 5%, stamp duty and 1% to the estate agent in comission although I think CX has a deal to half this (believe it's savills)
All in all.... Well worth it if you intend to stay long time BUT don't go overboard with the first mortgage AND don't rush into things..
Many of your 'future' colleagues have done the house buying bit many times before so if you listen you should be able to avoid the pitfalls and there are many...
Cheers, wellcome to Honkers...
PS. DB.................. You sure????????
Join Date: Dec 2005
Location: Aus
Posts: 154
Likes: 0
Received 0 Likes
on
0 Posts
Buying in HK
I bought in HK immediately after I arrived too, but there are a couple of things to be aware of.
I'm guessing but I would imagine that a 3 bed in DB (why?) would be around HK$5mil, so you'll need HK$500,000 in ready cash to cover the 5% deposit, stamp duty and mortgage tax. Buying in HK is quite expensive.
To add to dragon's post, there are a couple of rules laid down by the HKMC. Firstly, you cannot pay more than 50% of your salary on total home loan payments. In other words if you have a bunch of rental properties overseas, you have to take into account their payments too. To compound the problem, you are only allowed to use 50% of their rent as income. This is a particular issue as for the first couple of years as an SO the housing allowance forms a large percentage of your total income, after 2 years the housing allowance is significantly more than your monthly salary.
Clearance by the HKMC takes about a week I seem to remember.
I negotiated my repayments to be fixed at the maximum level payed by CX for the first 2 years, then the payments doubled at the 25 month point. For information you actually pay the increased amount yourself the first month, then claim it back from CX. Housing is pretty efficient tho'.
You have 15 years of payments, it's your choice if you want to delay for the first 2 years. I had done some research first, so was pretty sure where I wanted to go, I also bought a smaller place first (just in case!!) I was also hoping that there would be some capital appreciation.
Enjoy DB. It is for some people I guess!
I'm guessing but I would imagine that a 3 bed in DB (why?) would be around HK$5mil, so you'll need HK$500,000 in ready cash to cover the 5% deposit, stamp duty and mortgage tax. Buying in HK is quite expensive.
To add to dragon's post, there are a couple of rules laid down by the HKMC. Firstly, you cannot pay more than 50% of your salary on total home loan payments. In other words if you have a bunch of rental properties overseas, you have to take into account their payments too. To compound the problem, you are only allowed to use 50% of their rent as income. This is a particular issue as for the first couple of years as an SO the housing allowance forms a large percentage of your total income, after 2 years the housing allowance is significantly more than your monthly salary.
Clearance by the HKMC takes about a week I seem to remember.
I negotiated my repayments to be fixed at the maximum level payed by CX for the first 2 years, then the payments doubled at the 25 month point. For information you actually pay the increased amount yourself the first month, then claim it back from CX. Housing is pretty efficient tho'.
You have 15 years of payments, it's your choice if you want to delay for the first 2 years. I had done some research first, so was pretty sure where I wanted to go, I also bought a smaller place first (just in case!!) I was also hoping that there would be some capital appreciation.
Enjoy DB. It is for some people I guess!
Join Date: Jul 2007
Location: south
Age: 54
Posts: 8
Likes: 0
Received 0 Likes
on
0 Posts
I think I have the same problem.
I’m going to Hong Kong next week on an LSD Trip…. (by the way.... that’s a LOOK, SEE and DECIDE trip).
I’m more of the out doors type and, ideally, in a perfect world, I would like to see trees and grass.
I realise DB is a bit more of a concrete jungle, but, in ignorance, what’s wrong with Discovery Bay?
Is it possible to buy an old country home out in the New Territories as a ‘fixer-upper’? (or do I just have my head in the clouds?)
Any clues and advice?
I’m going to Hong Kong next week on an LSD Trip…. (by the way.... that’s a LOOK, SEE and DECIDE trip).
I’m more of the out doors type and, ideally, in a perfect world, I would like to see trees and grass.
I realise DB is a bit more of a concrete jungle, but, in ignorance, what’s wrong with Discovery Bay?
Is it possible to buy an old country home out in the New Territories as a ‘fixer-upper’? (or do I just have my head in the clouds?)
Any clues and advice?
Join Date: Dec 2005
Location: SE Asia
Posts: 194
Likes: 0
Received 0 Likes
on
0 Posts
as already mentioned before: you have 15 years of CX money for your mortgage.
If you buy right away and for the full amount you can afford (HSBC is willing to give you about 4,5 million right now as a new joiner S/O) the payments will cover just a little bit more than the interest on your mortgage, so you will more or less waste 2 years of these 15 without actually making money off your housing allowance.
I'd suggest you wait until your allowance goes up and look around for nice places in the meantime. and maybe even out of DB.
(It's not for everybody, you'll be surprised what happens to your S/O salary when the wife in their new circle of expat friends starts to get competitive with the wife of the big $$$ banker)
If you buy right away and for the full amount you can afford (HSBC is willing to give you about 4,5 million right now as a new joiner S/O) the payments will cover just a little bit more than the interest on your mortgage, so you will more or less waste 2 years of these 15 without actually making money off your housing allowance.
I'd suggest you wait until your allowance goes up and look around for nice places in the meantime. and maybe even out of DB.
(It's not for everybody, you'll be surprised what happens to your S/O salary when the wife in their new circle of expat friends starts to get competitive with the wife of the big $$$ banker)
Join Date: Aug 2006
Location: Tsui Wah, Orchard rd branch
Posts: 80
Received 0 Likes
on
0 Posts
The trouble with DB is it's full of wives telling everyone they meet and within earshot..."My husbands a pilot"....
However...
We did the sums and found its cheaper to rent esp in DB and got better capital appreciation with other investments/properties elsewhere in the world.
However...
We did the sums and found its cheaper to rent esp in DB and got better capital appreciation with other investments/properties elsewhere in the world.
And you're taking the p!ss out of people who live in DB?
747 dreamer, HK property is a bit of an eye opener compared with the UK. The house I rented on arrival in HK was the same size as the one I had in Oxfordshire, but the value of it was 4 times that of the UK.
747 dreamer, HK property is a bit of an eye opener compared with the UK. The house I rented on arrival in HK was the same size as the one I had in Oxfordshire, but the value of it was 4 times that of the UK.
Thread Starter
Join Date: May 2005
Location: England
Posts: 8
Likes: 0
Received 0 Likes
on
0 Posts
Thanks for the tips guys, is there much of a price drop if we go further south on Lantau? What areas will the Housing allowance fully cover mortgage payments or are there none unless you rent?
