Buying a Property In Hong Kong - Qi Homes

10 Useful Tips For Buying a Property In Hong Kong

Hong Kong’s real estate market remains very popular in the present. However, buying real estate comes with a lot of potential pitfalls whether people are interested in a studio flat for rent in Hong Kong or Hong Kong apartments in Central.

As a result, here are 10 tips to keep in mind when buying property in Hong Kong:

Buy in Markets with Upward Potential

Generally speaking, interested individuals shouldn’t buy real estate in markets at the peak of their popularity. Instead, they should be looking at markets that are expected to go up in the future.

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4 Biggest home buying fears (and how to face them)

Property purchase comes with skepticism, which usually makes buyers back off. If there is one big thing people commonly share when it comes to real estate properties, it’s the unavoidable fears and doubts that could block their way as they move along towards their new life. These fears can interfere with the decisions people make and make them reconsider. Regardless, these daunting doubts, worries, and questions must be faced in the wisest and most educated way possible.

1. Loss in Property Value

Property value can decline over time or due to specific situations. The environment around your house may affect the eventual valuation in ways that even savvy buyers wouldn’t expect. In the near future, the area around your house, might utterly change. You might see new buildings of sorts and new homes getting built, and many other pleasant or unpleasant developments take place – all causing fluctuations to your home’s value. No matter how hard you try to make your precious house as good as new, if the development of the surrounding environment isn’t getting a facelift, then nothing good will happen. Home buyers will refuse to notice your property, eventually reducing the value of your home.

The truth is no one really knows what will happen next. What we can do, however, is to take precautions. Choose a property near high-quality schools, top-tier buildings, and the like. Location matters

2. Overwhelming Maintenance Costs

There is no home that doesn’t necessitate maintenance, and maintenance usually comes with overwhelming bills. Clearly, there is no escape from the costs. Nevertheless, preparation is the key.

It is ideal to buy a new home as everything is expected to be good and new. Otherwise, you can choose a house that is well-maintained or has just been recently renovated.

3. Buyer’s Remorse

Buying dream home has been one of the ultimate goals of many. However, budget may get in the way, keeping you from getting the house of your dreams. This unsatisfying decision usually ends up with remorse. An easy solution for that is to walk out of the house. Sure enough, it sounds extremely hard. Nonetheless, there’s always plenty of fish in the sea. There are many other available properties that satisfy the concept of your dream house.

When it comes to keeping up with the budget, one neat solution for that is a wish list. On the list, include all the must-have home features you’ve been imagining inside your head. Set your budget and keep your list aligned with the Hong Kong property prices.

4. Unaffordable Mortgage Payments

In our day and age, people fear mortgage payments because of serious risks such as the instability of the world economy. When compared to renting, paying for a mortgage costs more. What if’s always come to mind like losing one’s job or running out of budget. People fear that if they fail to pay their monthly mortgage payment, their properties will be taken away.

Before taking a mortgage, set up your budget. Save emergency funds and health insurance for unexpected circumstances. Make sure to get everything controlled to avoid financial instability.

Fears and worries are always present in our mind, especially when one is about to engage with risks which are not exactly under their control. Qi-Homes offers services and gives insightful advice for home buyers, helping you get clear with any possible doubts and gather the courage to march towards your dream abode.

5 reasons buying your own home trumps renting

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At some point in life, one may be stuck between the decision of settling on a rented space or owning a house. This may trigger the curiosity as to which is better and which may be worth the risk. Experts may have answers for those questions. Here are the reasons why you should choose buying your own home over paying for rent.

1. It provides investment options

The value of most real estate properties can significantly increase over time. After several years, after you bought your own property, you might want to sell it for bigger value and buy another one. You can renovate the new one as your permanent home or save it for future investments. You can seek help from a real estate agent to find and negotiate with buyers.

2. It can make money

When renting, you spend your money for your rent. That amount you just paid can never, in any way, get back into your pocket. When buying your own property HK, you pay for the mortgage, but you also pay for yourself. You may not readily get the return on investment, but remember that you are buying an appreciating asset. In the long run, its price will considerably shoot up. If you are okay with staying at your old home, you can have the new one made available for rent, or the other way around. When the price goes huge in the future, you can sell it off and enjoy bigger rewards.

3. It builds future wealth

Real estate properties can be part of your success in the near future. Finally deciding to stop paying for rents and start investing for the future with your own home can be considered as your stepping stone in reaching success for the long run. Real estate can be a very ideal asset and owning your own place is a wise investment for the future.

4. It gives you a fixed address

Getting asked to leave from an apartment, for whatever reason, can be very mortifying and upsetting. Every time you leave, you pack everything up again and worry about where to go next. It can inevitably get you seem homeless at some point. Unless you hold a lifetime legal commitment with the landlord, you will always experience the same trouble over and over again. Having your own home gives you your very own fixed, permanent address. You can have the sense of security you badly crave for.

5. It saves you from asking permissions

Living in your own place gives you the absolute freedom you need. You can do just about everything you want to without asking for prior consent. It saves you the trouble of asking permissions from the hot blooded landlord. You become your own boss here.

Having your name written as a property title can indeed be one of the most amazing things that could ever happen to you. The idea of buying a property can seem really daunting. It’s a kind of decision that needs to be thought about for a really long time. Qi-Homes gives real estate expert advice. You are welcome to ask for a helping hand.

5 Reasons to be Thankful for a Great Hong Kong Property Agent

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The advancement of technology makes room for easier transactions. It’s all about less friction nowadays. With just a few clicks, people can now advertise whatever they wish to sell and buy without ever leaving the comfort of their own homes. But the nitty gritty of the real estate business is not as simple as some would assume, and when things get difficult, it is always advantageous to have a professional by your side. Here are five reasons we should be grateful for great real estate agents in Hong Kong.

1. They take over uncomfortable interactions for you.

Not everyone has what it takes to be a landlord. There are people who dislike confrontation and who would prefer to simply nod their heads and let things play out smoothly. If this is the kind of person you are, then the role is not for you. Meanwhile, being a landlord also takes compassion and levelheadedness. If you are hot-headed, impulsive, and have little control over your emotions, a property agent would be more than happy to assist you and pluck you out of what could be a very messy situation.

2. They will not lie to you.

No promises here, mind you, but real estate agents are less likely to lie to you than private buyers because they face bigger consequences if they do so. A licensed property agent is bound by the law to inform their clients of all the need-to-knows of the properties they are about to invest in. Furthermore, these agents rely on referrals and repeat businesses to keep their livelihood going. Acting in your best interest is in their best interest. You need not worry about them going behind your back and slacking off on you because their clients are their top concern.

3. They give you better access to good deals.

Real estate agents work day in and day out with their buyer and seller clients. They have quicker access to whatever property meets your criteria and could easily contact their fellow agents should a certain property peak your interest. A great real estate agent would flip the world over to find you the best deals and save you a ton of money.

4. They deal with the difficulties of the business for you.

The real estate business is not easy. It requires a lot of running from place to place, a pile of paperwork, countless hours on the phone with countless people, and a lot of stress. Because not everyone is easy to get along with, property agents could prevent bad blood between buyers and sellers by relaying concerns and keeping things from getting too personal. Your real estate agent catches all the punches thrown your way and passes them on to you in a gentler manner. Be thankful! Many property agents suffer from verbal abuse but take them on with a cheery smile for your sake.

5. They save you time.

As mentioned before, the real estate business is a big pain. You would have to handle mountains of paperwork, legal issues, troubles with the property, maintenance and repairs, and some difficult people. All this, along with your other responsibilities, makes each tick of the clock hanging on your wall a reminder of your fully scheduled day. Your property agent takes this stress off your shoulders and takes them on themselves so that while you spend your valuable time with your friends, family, and dog, they deal with all the hassles you now don’t have to.

A city of luxury and fashion, Hong Kong is also known for its beautiful skyline and natural harbour. This bustling metropolis has become a mini New York and is now a renowned destination for those wishing to make it big. It’s no wonder that finding a reasonably priced and comfortable living space is a bit of a challenge. If you are looking for a realtor who would make you thank the heavens for their very existence, look no further. Qi Homes Professional Agency is home to top property agents in Hong Kong. They specialise in sales, acquisition, consultation, renovation and letting of your properties.

Hong Kong Property Agents

10 Questions to Vet Hong Kong Property Agents

Real estate is a tough industry— especially when it comes to finding the best property agent. Hong Kong is a vast location with hundreds of properties available for purchase at any given time during the year. The catch is being able to lock your sights on property agents in Hong Kong who have the know-how to get you your dream home the quickest way possible. Here are 10 questions you should always ask a property agent before considering a purchase.

Hong Kong Property Agents

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1. What are your credentials?

Learning your property agent’s credentials will give you a better idea of whether or not they are the person you would like to have represent you on the market. Credentials allow us to verify the validity of a real estate agent and whether or not they are actually certified and trained to do their job.

2. What is your marketing strategy?

A good real estate agent has no issue with laying their marketing blueprints out in front of you. You want to be wary of real estate agents who are cryptic and do not openly share their methods with you. At the end of the day it is your money that is being invested— not theirs.

3. How much do you charge for your service?

Contrary to popular belief, real estate agents do actually get paid for their service. Although their payment is generally a commission that is earned through the sale of their homes, some real estate agents are hourly or salary workers that will expect payment per hour. It is vital that you know and understand payment methods, fees, costs and scheduling to avoid any hiccups in the purchase further down the road.

4. How much do your properties normally close for?

This number will allow you to have a good idea of what to expect payment wise. This number can also act as a gauge to let you know how much room you should make to cover your expenses, fees and other costs.

5. How close is the closing price to the asking/selling price?

The closer the two prices are together the better the chances of you actually being able to make a purchase is. These two numbers being close is also a good indicator that your real estate agent is a good closer and more than likely has the ability to help you save money on your purchase.

6. Are you a licensed also a licensed broker/realtor?

Believe it or not, not all real estate agents in Hong Kong are licensed brokers and realtors. This is why it is so important to verify their credentials to be sure that you are working with a legitimate worker who is able to handle your business requests.

7. How many more buyers are you currently representing?

It isn’t a good idea to pair yourself up with a real estate agent who is representing more than 3-5 clients. Why? They won’t have the time to put in inquiries, file requests and fill out paperwork necessary to get your home before it’s off the market. While some real estate agents are fine with managing more than one person, many with only take a few clients at a time.

8. How many properties has your company sold in my particular area?

This is a great indicator of what to expect from your real estate agent. The more properties they have sold, the more of a solid foundation they have to work off of to make your Hong Kong home purchase go from a dream to a reality.

9. What makes you one of the best property agents in Hong Kong?

You will want to know what the agent thinks about themselves and their abilities. If they exaggerate or go to extremes with their goals— you may want to further evaluate their work to ensure that they can practice what they preach.

Do you have any references?

When it comes to realty, references are previous clients that have agreed to vouch for the realtor. The longer the list the more rapport the agent has which naturally means they are more reliable. However, you may want to do your homework on real estate agents. Nowadays, you can perform a quick search to discover virtually anything about anyone online.

A guide to house hunting and finding the right agent in Hong Kong

House Hunting for that perfect home in Hong Kong can be a confusing and exhausting experience if you don’t have the right agent and go about it the wrong way.  Here is a guide to house hunting and finding the right agent in Hong Kong

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Image Showing Home Buyer looking at different property listings

Unfortunately, the real estate business in Hong Kong is loosely managed and in a competitive environment many agents may sometimes take an unethical route to get your business.

Do your research.

Firstly if you are researching on-line be careful where you look. There are several web portals in Hong Kong that are not affiliated with a particular agency and allow agents to advertise properties on their sites. Unfortunately some do not force their advertisers to verify their listings so some agencies post outdated listings that have been leased or sold in order to get you to call in only to offer you something else. Its a classic example of “bait & switch” and can be extremely frustrating to the consumer.

Secondly understand that all agents basically tap into the same pool of properties. Unlike other countries where an agent will solicit a listings from the landlord and promote a handful of properties, hong kong agents tap into a central database of available listings or can co-operate with other agents who may have one or two ‘exclusive” listings. It’s better to have one great agent working for you rather than several average agents. Work with an agent who listens carefully to what you need vs trying to push whatever they have on their books, don’t be afraid to share some of your research and forward links. A good agent will not only research that property for you but it will also give them more of an idea of what is important to you in terms of size and decor. Don’t be deceived by the size of an agency. Sometime the bigger the agency the lower the level of staff assigned to your account. The larger agencies tend to focus on keeping their corporate clients happy, the smaller agencies will usually have more senior or well experienced staff readily available for new clients.

Choosing the Right Agent.

Should you be choosing an online agency or a street level agent?  Keep in mind that street level agencies maybe limited by their jurisdiction i.e. they cannot show you something that is outside of their area. Whilst it maybe a good option if you know exactly where you want to live or even which building you want to be in, it may limit your options if you are open to multiple areas or want to see as much as possible.

Lastly be loyal and respectful. Keep in mind that a property agent is in the business to help you find a home but also it’s their livelihood. If you are simply browsing because you want to see what’s out there in case your landlord increases your rent or if you are seeing a flat as you need a comparison for something you love with another agent, be upfront and honest. In many cases an agent may cancel a serious prospect to show you around or sacrifice time with their kids on a weekend. Whilst it is their job, it only fair to give them a clear picture of your intentions before they do the work. Hong Kong is a small town – burning bridges does not help you.

Qi Homes was established in 2004 to address many of the problems associated with finding quality homes in the city. We identified a need for an easy to use, updated website of homes covering a broad range of budgets and areas. Our web site is updated daily and our company has a strict policy of taking down listings that are sold or leased as soon as possible. Each one of our agents are trained to listen to your needs and expectations, offer suggestions and advise and work together with you as a team to securing the right home for you and your family. We have long established relationships with other agents in the city and can proudly say that if it’s out there we can find it for you. For More Top Tips To House Hunting in Hong Kong

For more information about a Guide to House Hunting in Hong Kong or to speak to one of our property experts, please contact us via email or call 28581406

When is the right time to Buy Property in Hong Kong?

Hong Kong is a property obsessed city…as anyone who has spent any time here will attest, the subject of property inevitability comes up in a conversation whether you are at a friend’s house for dinner, out for a couple of cocktails, or on a boat with strangers. So the question remains: When is the right time to buy property in Hong Kong?

To answer this question we should look back in Hong Kong’s history to find out how landlords in Hong Kong have become some of the wealthiest and some would argue the greediest in the world.

History of the Hong Kong Property Market

My mother came to Hong Kong in the late 40’s from Shanghai explains Anthony Hindmarsh, director of Q-Homes.  Back then, she would say that Hong Kong was not a wealthy city.  Many people who escaped the communist stronghold in China came on boats leaving most of their belongings back in China.  Only the wealthy were able to secure one way plane tickets along with their smuggled bars of gold. She moved into a flat on 65 Robinson Road in 1947; back then many flats did not have proper plumbing and families would live together, with often 3 or 4 generations in the same rented accommodation with no toilets.  Every morning an  “yeh heung por or night fragrant hags”    would come and clear the bed pans or sputtins.  It was no easy living and many people would find their wages only enough to cover their basic necessitates.  However what it did do was instill a sense of frugality and savings into many of the new immigrants to Hong Kong.

Many of these immigrants opened their own business such as retail or manufacturing and as Hong Kong became more prosperous in the late 60’s and early 70’s, around the time that foreign exports rose, these business owners became more cash rich and bought property

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Image of Hong Kong Harbour from the Peak

Hong Kong experienced various property declines in the 1956 and 1967 riots with many expats leaving Hong Kong due to the instability of the city but many people who stayed back decided that they would take advantage of the property prices and purchase.  As soon as stability returned to the region and demand increased, property prices subsequently rose again and many of these owners now found that they were holding onto equity and were able to leverage that for the purchase of additional properties.  Soon the sale and purchase of property become as speculatory as the stock market, with gains sometimes made in one day as purchases and vendors would sell their equitable interest as “confirmor

The first generation of educated wealthy Hong Kongers were well established in Hong Kong and many owned one or more properties; however, after Tiananmen Square in the mid-80s, many of these owners had who lost their properties escaping from China began to worry that history would return and haunt them again.

Therefore Hong Kong experienced a massive “brain drainin the early 80’s when many of these educated professionals emigrated to Canada and Australia, consequently selling up their assets in Hong Kong and moving overseas. Those that did not qualify for immigration stayed back in Hong Kong and Took over those posts that were left behind and they bought property is in the 80s and 90s, many of which have paid off their mortgages today.

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Graph Showing Hong Kong Property Price Index from 1980 to 2013

 

The Demographic of the Hong Kong Landlord

A recent survey concluded that only 40% of Hong Kong Home Owners still have mortgages on their properties, which means that more than half have clear title.  This explains why landlords have such “staying power” during the downtimes.  Many are not desperate to sell, explains Hindmarsh.  Landlords learnt lessons from history and instead of selling cheap they rent out the property and “sell with tenancy” if someone offers the right price.    They are still able to generate more return than cash sitting in the bank.    Unfortunately, this poses difficulties for buyers, as viewings can be difficult and buyers are subject to various additional stamp duties highlights Anthony.   Stock of vacant properties for sale is extremely limited, especially in the under $10 Million price Bracket, says Anthony, with demand from buyers who are keen to step off the rental ladder and into home ownership. This is keeping demand strong and prices resilient, contrary to various forecasts for a huge price drop, which has been predicted for the last 4 years.

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Graph Showing Residential Property Price Trends

Shortage of Stock Made Worse with Cooling Measures

Many times I will go out with a client and there might be one vacant flat to view in a building of 200 units.  Buyers are shocked by the lack of choice and even when they see something they like, not all vendors are motivated to sell, meaning the prices are not very negotiable despite the low transactions explains Hindmarsh.  Vendors are worried they cannot get back into the market and that low interest rates means their cash is losing value.  The serious vendors are typically those who are moving funds offshore to cities like London or downsizing as they find themselves empty nesters.

Forecast and Recommendations

My recommendation to my clients is to take a long term view to purchasing property in Hong Kong.  If you plan to be in Hong Kong for the next 10 years, then buy now.  Rental Prices continue to increase and property prices on a global level are going up.  Any correction in the property prices will be short term, as supply remains limited while demand is still strong.

Furthermore, consider buying an investment property to get your foot into the property market.  Many clients look at their current lifestyle and compare to what it would cost to buy something similar and are put off by the high deposit requirements, sometimes forgetting that their landlords may have started off themselves with something smaller and built equity to upgrade.  If you plan on living in Hong Kong for the next 10 years, then it makes sense to buy and pay your own mortgage rather than someone else’s.   In 10 years’ time, your mortgage will be 10 years shorter so even if the market is the same levels as you buy today, you will have made a big contribution to your repayment and of course any gains in the property market will be a bonus.

PROPERTY SHOWCASE – Turnkey One Bedroom in Soho

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Anthony was born and raised in Hong Kong and has over 13 years’ experience in the industry.  He speaks fluent Chinese and has a very strong knowledge of the city and a deep understanding of the cultural and political motivators that drive the real estate market.Anthony

For More information about Buying or Selling Property in Hong Kong or to discuss when would be the best time to buy property in Hong Kong please contact: Anthony Hindmarsh via email: anthony@qi-homes.com or call 28581406 today.

 

 

 

 

 

Hong Kong Property Mortgage Applications Increase

imageThe number of Hong Kong Property Mortgage Applications Increase up by 22.8% in January 2015 increased month-on-month by 22.8% to 13,608. Reports the Hong Kong Monetary Authority On 27th Feb 2015

Mortgage loans approved in January 2015 increased by 21.4% compared with December 2014 to HK$30.3 billion.  Among these, mortgage loans financing primary market transactions increased by 43.7% to HK$7.9 billion and those financing secondary market transactions increased by 18.1% to HK$17.8 billion.  Mortgage loans for refinancing increased by 4.6% to HK$4.6 billion.

Mortgage loans drawn down during January 2015 decreased by 2.7% compared with December 2014 to HK$21.3 billion.

New mortgage loans priced with reference to best lending rates decreased from 13.5% in December 2014 to 13.3% in January 2015 with majority priced within the range of 2% and 2.25%. New mortgage loans priced with reference to HIBOR decreased from 84.5% in December 2014 to 84% in January 2015.

The outstanding value of mortgage loans increased month-on-month by 0.9% to HK$993.1 billion at end-January 2015.

The mortgage delinquency ratio remained unchanged at 0.03% and the rescheduled loan ratio remained unchanged at nearly 0%.

Hong Kong Goverment Amends Mortgage Insurance Program “MIP”

Hong Kong Government Amends Mortgage Insurance Program “MIP” on Friday to coincide with with changes in the current mortgage loan to value ratios. Refer to our blog

Under the current system The Hong Kong Mortgage Corporation Limited (HKMC) provides MIP coverage for mortgage loans starting at 60% loan-to-value (“LTV”) on owner-occupied residential mortgage lending for properties valued below HK$7 million (up to 90% for properties valued at HK 4 million and under),  The remaining 20% is covered by the insurance program thus reducing the credit risks to the banks resulting in the homebuyer only having to pay a 20% deposit.  Therefore, in addition to helping the promotion of home ownership, the MIP also contributes to the maintenance of the banking stability.
Under the new revisions MIP coverage for eligible properties will be as follows
Property Value Maximum LTV Ratio
Up to HK$4 million 80% or 90%*
Above HK$4 million and below HK$4.5 million 80% – 90%*, subject to a cap of HK$3.6 million
(whichever is lower)
At or above HK$4.5 million and up to HK$6 million 80% or capped at HK$4.8 million
(whichever is lower)

* only applicable to regular salaried first time homebuyers (not holding any residential properties at the time of application) with maximum debt-to-income ratio of 45%

The above revisions take effect immediately.  However, for homebuyers who have executed the provisional sale and purchase agreement on or before 27 February 2015, their mortgage loan applications may be submitted by the MIP for processing.

Hong Kong Government Imposes New Cooling Measures to Dampen Property Market

The Hong Kong Government has taken additional steps by  Imposing New Cooling Measures to Dampen Property Market.

The news announced by the Hong Kong Monetary Association on Friday see changes to the the loan-to-value ratio for mortgages on residential properties costing less than HK$7 million is capped at 60 per cent, down from the previous range of 70 per cent.

Effective immediately, the measures are the seventh move since February 2013 intended to cool the soaring property prices, which have reached an all-time high amid inflows of capital and historically low interest rates.

Refer to our post https://www.qi-homes.com/blog/kong-kong-property-prices-rise-13-amid-new-bubble-fears

Some analysts questioned the longer-term impact of the measures.

“The impact of this will be very short-lived as interest rates are still very low and Hong Kong’s inflation remains high relative to the region, which means effective real interest rates are still in negative territory,” said Raymond Leung, an economist at ANZ in Hong Kong.

The HKMA also reduced the amount of debt that borrowers can service to 40 percent from 50 percent for all mortgage loans taken for non self-use properties. All measures will be effective immediately.

Property Prices surged about 130 percent since 2008 due to low interest rates, a supply shortage and ample liquidity

The government have said they will monitor the property market closely and, if necessary, roll out other measures