Reports of some buyers in their 20s and early 30s snapping up expensive small apartments in Hong Kong have left many people scratching their heads.
How are the youngsters able to afford such purchases? — this is the question that is seizing the minds of ordinary citizens.
Well, if you ask me, I would say that most of the transactions are probably being carried out with the help of their parents.
Last month, I came to know first-hand of two cases where the elders had subsidized mortgage down-payments for their children.
And what is interesting in that both cases, the assistance of the parents — who are my friends– stemmed out of a sense of duty towards their daughters.
One has heard about the “Canadian way” of marriage in the past, where it was said that marrying a Canadian woman will get a person a free home.
This practice now appears to find a new home in Hong Kong, where parents are anyway accustomed to granting some incentives to their newly married.
I need to be careful here because I am not suggesting that the sweetener is a new way of solving the “single lady problem”, which has arisen out of gender imbalance and increased cases of Hong Kong men opting for mainland Chinese brides.
To give some facts, both of my friends’ daughters are only 27, and their husband/fiancée are also of the same age. And it also happens that in both cases, the brides’ families are relatively more well off than the other side.
In one case, my friend said her daughter had asked him if the parents could provide housing assistance when they get married next year. Without parental help, they wouldn’t be able to buy a house as both the partners wouldn’t meet income criteria, the daughter is said to have pointed out.
My friend then offered to provide a down-payment (giveaway, really) as well as a bridging loan (repayable at zero interest) for a HK$3 million studio flat. Later, after my friend’s wife stepped in, the offer was upgraded to around HK$4 million for a one-bedroom unit.
“My wife said it is too undesirable to live in a 300-square feet unit,” he said. “She is the CEO, and I am the CFO whom she relied on executing the plan” for the daughter.
The assistance was deemed necessary given the sky-high property prices.
My friend recalled that mortgage down-payment used to amount to about 20 times a couple’s combined monthly salary at one time, but now it now comes to more than 100 times monthly income, which is difficult for the younger generation to bear.
Apart from the market realities, the inclination of parents to provide housing for their kids also stems from a belief among Chinese families that a person should own some property after marriage, a notion that real-estate developers are only too happy to endorse.
Having an own house will make the marriage bond stronger and prevent the partners from splitting up, many people believe.
Looking at my own relatives, friends and acquaintance, I must say that most people who had their own homes are still together, even as the overall break-up ratio in the city is quite high.
That said, I will hasten to add that there is really no proof of correlation between property ownership and marriage bonds.
Now, coming to my second friend whose case I mentioned earlier, his explanation is fairly simple.
The lady just wants her daughter to stay within the same district. So, the parents decided to give the young couple a Mid-Levels flat to stay.
The elders will, in return, get a regular monthly contribution from their kids. More important, they will have the satisfaction of having helped their children settle down and perhaps start their own families.
Guess what, these are happy parents telling happy stories.
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