Forget the notion that success hinges on your father’s deed.
If our former colonial masters are to be any guide, you have better chances of inheriting an estate from your grandparents.
That should be good news for the government as it tries to pacify the city’s youth who are growing impatient and frustrated over their inability to afford their own homes as property prices continue to surge.
According to pension insurer Royal London, hundreds of billions of pounds is set to leapfrog a generation and pass directly to the third generation from their families in the next decade.
As many as four million out of the 17 million UK citizens aged 25 to 44 will be in the “fortune position” awaiting to inherit from their grandparents who own real estate.
The average size of property is between 400,000 pounds (HK$3.99 million) and 500,000 pounds (HK4.99 million).
That’s according to a study of 5,600 adults including most property-owning grandparents, who are ready to give substantial sums to both their children and grandchildren while they are alive.
A quarter of these grandparents aged 75 to 85 would give their assets straight to their grandchildren to help younger family members buy homes after their death.
The nice thing is the babyboomers – aged 45 to 64 – are fine with their parents’ wish if they do not specify this in their wills because they also want the younger generations to become homeowners themselves.
That probably reminds you of how local parents would buy flats for their children not just for investment, but because the government would impose a 15 percent stamp duty on homebuyers with more than one property.
Home prices have been skyrocketing all over the world over the past decade. What we have seen in Hong Kong is also happening in Britain, China and Canada (where I read with shock that a Toronto apartment was up 30 percent in the past six months).
Amid the volatility of global markets in a relatively warless period, investors have realized that real estate is the best assets class that can be passed to the next generation.
And if many people subscribe to this view, chances are the prices will go even higher, which will make it even more difficult for the younger generation to afford their own homes.
That is why it has become so common for young people to rely on their parents to pay the down payment of the home mortgage, which is why “success hinges on your father’s deed” has become such a popular saying in Hong Kong.
Thanks to the Royal London report, our youngsters should now realize that the faster way to inherit a real estate is not from their parents but from their grandparents.
Now the question is: When was the last time you visited your grandpa?
You are reminded that Father’s Day is just two months away, and it would do you a lot of good to visit your grandpa.
He would be so pleased to meet you. (It would be better if he hadn’t read about the British survey.)
– Contact us at [email protected]