With grandma’s passing, there is an extra capital – precisely HK$1.25M, that can be available now. (mother is keeping $50k)
After quite some research, the Hung Sui Kiu area is quite suitable for mother, and should have good potential as an investment as well.
I want to take this post to dive into the details and try to see what decisions I need to make.
滙都 high park
So there is a new development unit being finished in June 2025. It’s selling right now, and it looks very suitable.
The pros:
- location – near light rail station and small malls, supermarkets, wet markets, bus station
- price – basically the cheapest I can find in Hong Kong so far that actually has 配套 around
- HK$3.3-3.6M for 1 bedroom, 300+ sqft.
- investment potential – new development plans, new MTR station, etc.
There honestly aren’t any cons as far as I’m concerned, beside the fact that I was hoping to buy at $3M initially.
Ongoing cost calculations
Originally I was hoping to spend <$3M on a unit, since the stamp duty is $100 at that price, and also it seemed like there were some reasonably livable places at that price, maybe some studio 200-250sqft units.
If home price $3M, borrow 80%, down payment $600k, borrow $2.4M
- at 3.625% – Monthly payment – HK$10,945 (principal ~$3500-4000)
- At 5.25% – monthly payment would become HK$13,253 (principal ~$2500-3000)
- Management and Mics fees = $1500/mo
- Remaining 650k investing @10%/yr = ~$5400/mo
> NET outflow – $7~9k interest + 1500 fees – 5500 inv income = -3000~5000 net outflow
If home price at $3.3M, borrow 80%, down payment $660k, borrow $2.64M
- at 3.625% – Monthly payment – HK$12,040 (principal ~$4000-4500)
- At 5.25% – monthly payment would become HK$14,578 (principal ~$2800-3200)
- Management and Mics fees = $1500/mo
- Remaining 590k investing @10%/yr = ~$4900/mo
> NET outflow – $8~11k interest + 1500 fees – 5000 inv income = -4000~7000 net outflow
Not buying
- 1.25M investing @10%/yr = ~$10500/mo
- Rental costs = $10000/mo
> NET outflow – $0
Buying Now vs. Later
So I think in the next round, the 1 bedroom won’t be at $3M. I am thinking acceptable ones would be around $3.2-3.3M.
I want to try to list out the advantages and disadvantages of buying now vs. waiting later.
Buy Now Pros:
- Comfortable permenant home – be able to get a large 1 bedroom new unit in Hung Siu Kiu. Others aren’t quite available.
- Rental risks – if the Hcube unit can’t be rented anymore, there would be a significantly quality downgrade if wanted to keep rent at ~$10k
- Long term capital gain – even if prices fall in the short term, in 20-30 years it will gain based on inflation and fiat debasement. Plus maybe if HK develops further. If not, it might become a more viable place to live in the future?
Buy Now Cons:
- short term capital loss – if market drops another 20-30% or even more, can be huge damage to capital that will take a long time to recover
- interest rate – if US rate goes up to historically high levels and prices will fall, equity will fall while the interest payment skyrockets
- other??