Hong Kong’s cheapest homes are still expensive

A good friend who earns HK$38,000 (RM20,287) as a non-managerial staff says it is impossible to buy an apartment by herself in Hong Kong.

In fact, it is still not possible even after combining her husband’s monthly salary. Their downpayment was only met with assistance from their parents.

Based on salaries earned, the cost of food is actually low in Hong Kong. However, the “killer” in many advanced property markets is still property prices.

Hong Kong is also a city of mosquito flats sold at millions of ringgit each. Here’s an earlier article. 

Now however, many ordinary Hong Kong folk may get a chance to buy cheaper homes, up to 38% below market levels, an article in The Star reported.

Hong Kong’s government however, will start to sell the first batch of cheap homes, called “starter homes”, which are in Kowloon.

These units, which Hong Kong folk can start to apply for in January this year, will be priced around HK$13,000 (RM6,940) per square foot, according to the Hong Kong Economic Journal.

In another government programme to provide cheap apartments in 2018, more than 260,000 applications were received for 4,431 flats. People eligible for the 450 starter homes included single permanent residents who earned no more than HK$37,000 a month and didn’t already own homes.

Buyers face restrictions on reselling, the Economic Journal reported. Hong Kong’s home prices are still 50% higher than five years ago despite dips in the past four months, The Star said.

Here in Malaysia, we face a similar situation. Homes are said to be already at an unaffordable level for many. Earlier article here.

The Khazanah Research Institute said that in order for homes to be affordable, it had to be priced below RM300,000.

According to many who need affordable homes, the location of the home must be strategic; near to amenities which they like and preferably be landed too.

Stop predicting the market, start understanding all these advanced property markets which are many years ahead of us, the emerging markets.

Heed the  Advice from our former Bank Negara governor (read here). . Just remember to buy within your range of affordability to stop the bubble from building.

This article first appeared in kopiandproperty.com

Charles Tan blogs at property investment site kopiandproperty. He dislikes property speculators and disagrees that renting is better than buying. He thinks it’s either property or poverty. He is presently the CEO of an auction house auctioning assets beyond just properties.