Asia HK property!

Looks poised to be picking up again. My sources on the ground tell me strong price gains lie ahead over the next 3-6 months ...

http://m.scmp.com/news/hong-kong/ec...omy-smashes-forecasts-first-quarter-2017-grow

 

Good for me. I've held Link REIT since it was $25 a share.

 

Remember the various surcharges on place which can add another 15% on top of purchase price. also you have someone to manage it for you? the quality of managing agents is pretty poor in general.

 

They are usually self managed. The letting agent takes their 1 month rent for finding the renter, then hands it over to the owner to run it day to day. A large difference is that maintenance costs are lower, in Aus you would allow 25-30% expenses whereas there you can allow 10%-15%.

 

You mean agency costs are lower? I don't see how maintenance costs would be lower unless it was more like the Germany model where tenants have more power to maintain their own properties like paining and stuff.

 

In HK, 90% are flats, apartments. no gardens, roof, outside of house maintenance. therefore cheaper. But if you are buying older flats, then watch out for huge refurbishment costs for the whole building.

 

I mean relative to Australian apartments.

 

Link REIT is an outstanding stock. For many reasons, it is really the #1 stock I would recommend in HK at present. (Just hit close to a record high yesterday).

 

Yes maintenance costs seem lower. Have a few friends who own and comparing costs was a lot different. Basically what @spoon said. Even refurb costs are spread over many more apartments than Aust.

 

Tradies cheaper? Body corp cheaper? Lower taxes and council rates? What is it that separates a Hk apartment from an Aus one?

I suspect it's the tradie part. I think Aus is unique in that blue collar workers can comfortably earn six figure salaries which is not common elsewhere.

 

Tradies cheaper, less things to break down and go wrong. Air con maybe an expense every now and then. Less (or no) insurance in the case of my friend. Yes lower taxes, body corp is comparable from my limited sample. No ovens, no roof issues, hws are pretty basic, hardly any plumbing issues...etc

 

Kitchen is a good point. Many Hk'ers I know don't even have an oven or dish washer. Theu jusr have a microwave and basic stove top, they go out to eat 90% of the time. I went there saying ok I'll cook an Aussie meal for you, where is your oven and most of them were like why the hell would we have an oven??!

 

Yes ovens are a luxury and dishwashers are non existent. Who needs a dishwasher when you eat out so much or you have a helper

 

Not to mention many fewer amenities, you'd be hard press unless you get into more luxurious type living to find such things as pools etc.

HK apartments are basically white box, bare basic living. In fact, I don't even consider those apartments as "homes". My mate married a local HK girl and he says they are hardly at home because it's so tiny and has that claustrophobic feel.

 

Lol. Well that's more the local and smaller places. The expat places are usually fully set up with modern kitchens. (Plus helpers quarters which is great).

 

True for some places. I know some HKers who live in lovely high end resorts with pools gyms BBBs bowling alleys etc. One great HK apartment complex is called Park Island.

http://parkislandhongkong.blogspot.com

 

Here's a good eg of a modern HK condo:

http://parkislandhongkong.blogspot.com/2011/05/pool-facilities-on-park-island.html

It's really a myth that all HK people live in small places. The great thing about HK is that there is something for everyone.

 

With a REAL oven!

http://parkislandhongkong.blogspot.com/2011/07/nice-apartment-on-park-island-with.html

Yes HK has great dining and nightlife but remember around 10% of population are expats. The British influence, and Ozzies and US etc means that people do indeed want their ovens. Remember many are bankers and business people so they need to be catered for!

 

HK government just today announced more measures to try to cool the market:

Personally I'm not a fan of Government intervention:

http://m.scmp.com/business/companie...tens-mortgage-rules-second-time-week-property

 

the intervention last year was not thought out very well (15% stamp duty for buying a second property), basically second hand sales are almost dead as nobody wants to let go of property unless u pay a huge premium; and everyone just rushes to buy first hand property (where developers can give mortgages on top of the 50% max LVR / LTV imposed on banks).

banks still flush with liquidity despite the US rate hike (HK is linked given the pegged exchange rate), i just purchased with an effective mortgage rate of 0.9% for two years