Hi I'm an Aussie thats living in HK for the past 3 years having made my first purchase in property here 2 years ago.
Just wondering is anyone looking at the numbers on property here? Sure its run but purely from anumbers perspective very attractive. Yields are ~4% (higher if u rennovate and labour cost is cheap here u can modernise an apartment for ~35k AUD), and interest rates are as low as 0.8% to 2.15% depending on what loan you take. The key is HKD is pegged to USD so rates here are following US rates.
On a purecashflow modelleing perspective 4% yield vs 2.15% financing is very attractive even pricing in future rate increases (you can fix for 10 years I believe at 3.5% as well if u would like).
On a long term growth perspective HK has a fundamental disconnect where assets are priced in a currnecy thats pegged to USD and the values of the assets follow china growth.
What are the risks? Minimal in my case, interest rate risk which can be minimised by fixing your rate. Volatility of HK prices. They have rallied 30% in the past year dropping 30% in the GFC. Sure very volatilte if your yield / cashflow is finejust don't look at it and look long term. Volaility of rents? THis hit me slightly in GFC My apartment rented for 25% less hurting cashflow a bit. But from my modeeling this managable I have an estimated floor for rent and I can take -ve cashflow for the short term...
I've bought my first considering buying my 2nd (I still hold onto 2 aussie properties as I plan to return home at some stage). Thoughts on this?
Cheers
Just wondering is anyone looking at the numbers on property here? Sure its run but purely from anumbers perspective very attractive. Yields are ~4% (higher if u rennovate and labour cost is cheap here u can modernise an apartment for ~35k AUD), and interest rates are as low as 0.8% to 2.15% depending on what loan you take. The key is HKD is pegged to USD so rates here are following US rates.
On a purecashflow modelleing perspective 4% yield vs 2.15% financing is very attractive even pricing in future rate increases (you can fix for 10 years I believe at 3.5% as well if u would like).
On a long term growth perspective HK has a fundamental disconnect where assets are priced in a currnecy thats pegged to USD and the values of the assets follow china growth.
What are the risks? Minimal in my case, interest rate risk which can be minimised by fixing your rate. Volatility of HK prices. They have rallied 30% in the past year dropping 30% in the GFC. Sure very volatilte if your yield / cashflow is finejust don't look at it and look long term. Volaility of rents? THis hit me slightly in GFC My apartment rented for 25% less hurting cashflow a bit. But from my modeeling this managable I have an estimated floor for rent and I can take -ve cashflow for the short term...
I've bought my first considering buying my 2nd (I still hold onto 2 aussie properties as I plan to return home at some stage). Thoughts on this?
Cheers