The housing and property markets are permanent fixtures of Hong Kong’s cosmopolitan economy. However, one perennial question that consistently comes to a potential Hong Kong homebuyer’s mind: is it currently a good timing for me to buy a home?
Amidst rising prices make Hong Kong the most expensive housing market in Asia. Experts advise to enter with caution or to keep a level head. The good news is that Hong Kong’s government is doing its best to address the surge in property prices. One of the measures proposed earlier was the vacancy tax to address “hoarding” of empty houses.
With this in mind, it is also important to survey your own personal readiness to acquire a new home in Hong Kong. Here are five considerations you must take when you are making the move to buy a new home.
Your profile as a home buyer
Do you happen to have an existing mortgage with a bank, or are you a first-time home buyer who’s more conservative with the budget? Is buying a home part of your financial plan? What range of properties are you looking for? As a buyer, how ready are you to endure price fluctuations in the market? These distinctions matter, as they determine what type of mortgage programme will be best for you.
Your budget for securing a property
The wise buyer will be purchasing a home with full knowledge of how to work out your affordability. In preparation, it is good to utilize a tool like this mortgage affordability calculator to calculate the maximum amount of money you can borrow, the ideal price range for properties to buy, and how much the monthly repayment will be.
Market value of the property you’re looking to buy
Once you’ve ironed out the details of your personal financial situation, it’s time to scour the market: contact property agencies, check public listings and use an online property valuation tool to get an estimated market value. Then, you will get a wish list.
Mortgage policies that you need to know
It will be prudent to assess the mortgage policies regarding the maximum loan-to-value ratio and debt-to-income ratio. The ratios will be affected by the factors such as
- Property use: self-use versus non-self-use
- Income source: from Hong Kong versus outside Hong Kong
- Single versus multiple mortgage
- Credit underwriting: debt servicing ratio (“DSR”) approach versus asset based lending
What documents you’ll need to get the mortgage approved
When the decision is more or less final, you’ll need to get ready the documentations to complete the process—including the sale and purchase agreement and the income proof. You may also try some preliminary assessment services of banks that may give you an approval-in-principle even before you actually buy a property!
If you’ve determined that you’re ready, it’s time to explore Hong Kong’s wide housing market in earnest. Soon, you will have, in your name, both a home and a source of future livelihood.