Date
23 May 2017
Kingwood Villa has seen some home prices double in five years, mirroring the overall market trend. As buying a flat becomes ever more difficult for young people, lawmaker Aron Kwok (R) has weighed in with some advice. Photos: HKEJ
Kingwood Villa has seen some home prices double in five years, mirroring the overall market trend. As buying a flat becomes ever more difficult for young people, lawmaker Aron Kwok (R) has weighed in with some advice. Photos: HKEJ

Starving — before getting a small home

How long can you go without water and food?

Well, most people would bet that they wouldn’t last more than three days without those basics.

But guess what, if you can manage to do that for seven months, you might be able to buy a small public housing unit in our city.

That is according to lawmaker Aron Kwok Wai-keung, as he outlined research on how local youth can secure their first home under the government’s home ownership scheme.

The logic of Kwok, who is from the Hong Kong Federation of Trade Unions, is simple enough.

The median income of Hong Kong workers is HK$15,000 a month. Assuming they can get 90 percent mortgage, they need to put in HK$200,000 to secure the cheapest available flat costing HK$2 million.

Now, if a double-income couple does not spend a penny on food, water or any other thing, they can save enough in seven months to put down the deposit. 

Kwok makes it sound easy, except that it’s more of a fantasy than a real practical suggestion. 

Can anyone put aside their entire income and not spend at all?

True, many youngsters nowadays can buy flats for themselves only if they are living with their parents or getting financial support from the elders.

Still, expecting the youth to save every single penny from their salaries is just bonkers. 

Who will pay for outside meals, phone bills, transport and the like?

Meanwhile, the seven-month full savings requirement may also not work, given the ever increasing property prices. 

Prices are shooting up even in a place like Tin Shui Wai, the poorest local district which is closer to Shenzhen’s Futian rather than our own Tsim Sha Tsui.

In a recent transaction, a small but exclusive Kingwood Villa overlooking Mai Po went for HK$4.43 million, or over HK$10,000 per square feet. The seller had purchased the flat for HK$2.27 million five years ago.

Many similar units have seen their prices surge about 20 percent in the last 18 months, a clear sign of panic buying as people expect the values to rise even further.

Some of the blame must fall on mainland developers which had bid aggressively for land plots in Hong Kong as they sought to boost their asset portfolios here.

As no one is willing to undercut prices, it is reported that only 15 percent of the units available for sale are below HK$10,000 per square feet. Most of the homes, I guess, are not too far off from Tin Shui Wai.

Mind you, Tin Shui Wai prices are a good barometer when it comes to gauging a peak for the market — similar to how Citic or Cathay Pacific shares are seen with respect to the stock market.

When the two blue chips lead a rally and hit the headlines, it is often considered a good time to do some selling.

Unfortunately, we cannot say the same or take any bets when it comes to the property market.

Coming back to Kwok, we will advise the lawmaker to go easy on his fantasy theories.

– Contact us at [email protected]

BK/DY/RC

EJ Insight writer

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