With grandma’s passing, there is an extra capital – precisely HK$1.25M, that can be available now.

(mother is keeping $50k. Update – will be getting the entire 1.3M)

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. It is currently selling for $3.37M, the unit that I want to purchase.

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 might 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
• the down payment is locked up in the property and cannot be invested. at $3.3M thats 660k locked up which can generate $5-6k/mo at 10% annual
  • the question is whether the HK property prices can catch up after leverage
  • If it can go up 50% in the next 10 years, that’s a 1.5M increase on my ~800k investment which would translate to 6-7% annual return – +3-4% rental savings return = ~10%
• Risks of 樓花 – unsure of real quality, management issues, never lived in that area before, etc.

Current Conclusion

At the current price of $3.37M, I think I will pass for now, given the risks and opportunity costs of the down payment capital.

If the next round it can drop to $3.2M or lower for the desired unit, I will take that as God giving us a sign to go ahead and buy. (so for example, 3.19M)

(with mother pulling out 100-150k extra)

If the next round it’s 3.2M and higher, then we will pass the opportunity to buy 滙都 for now and wait for something else, or wait for the housing price to drop again.

If it doesn’t drop, the gain from 10%+ annual return of capital can cover anyways, and it’s less risky.

20241219 update

The new round came out – HK$3.25M for the cheapest 1bed unit.

Honestly a bit 心動 but the rule was 3.2M or below. So even 50k over is still over.

Will be passing on the purchase for now. Let’s see if 2025 there would be a further decline and I can buy it at <3M. If not, again keep renting and using cash to get capital return is not bad anyways.

20241225 thoughts update

I’ve updated in my chinese post already but just to make the remark here.

As far as supply, new developement should have slowed significantly now and by 2026-27 it might stabilize with the demand.

Also I suspect there would be a 回流潮 from the UK immigrants because they would have received the citizenship from 5+1. starting from 2026 extending until 2028-29 maybe there would be a demand surge.

Also if this rate-cut cycle ends in 2026, toward the end of the cycle should mark the end of the downward price cycle.

Let’s see if toward the end of 2025 or early 2026 might be a good timing to go in. Will revisit this post in a year.