Cheapest home in most expensive city.

A good friend who earns HK$38,000 (RM20,287) in Hong Kong as a non managerial staff told me that it’s not possible to buy an apartment all by herself. In fact, it’s still not possible even after adding in her husband’s monthly salary. Their downpayment has to come with assistance from parents. Based on the salary, the cost of food is actually low. However, the ‘killer’ in many advanced property markets will still be the property price. Hong Kong is also the city where mosquito flats are sold at millions of ringgit. Here’s an earlier article.  Now, many of the ordinary people in Hong Kong may get a chance to buy a cheaper home, up to 38 percent below market levels. 

Article in TheStar.com.my here.  Hong Kong’s government will start to sell the first batch of cheap homes. These “starter homes” are in Kowloon and will be priced from about 38 percent below market levels. It will be around HK$13,000 (RM6,940) per square foot according to the Hong Kong Economic Journal. People can start applying from January 2019.  In another government program to provide cheap apartments in 2018, more than 260,000 applications were received for 4,431 flats. People eigible for the 450 starter homes include single permanent residents who earn no more than HK$37,000 a month and don’t already own homes. Buyers face restrictions on reselling, the Economic Journal reported. Hong Kong’s home prices are still 50 percent higher than 5 years ago despite dips in past four months. Article in TheStar.com.my here.  

Here in Malaysia, we face similar situation. Homes are said to be already at an unaffordable level for many. Earlier article here. Khazanah Research Institute said that in order for homes to be affordable, it has to be priced below RM300,000. According to some of my friends who needs an affordable home, the location of the home must be strategic; near to amenities which they like and it should 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. Just remember to buy within our affordability and stop bubble from building. Advice from our former Bank Negara governor (read here).  Happy deciding. 

written on 19 Dec 2018

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