Living in a city with the most expensive home prices in the world, most young Hongkongers face a common problem: they want to have their own home but cannot afford to buy one.
As a result, they depend on their parents to provide them with financial support.
A survey commissioned by retirement fund management fund company AIA MPF found that about 70 percent of the parents think it is inevitable to take money out of their own pockets to help their children onto the property ladder, the Hong Kong Economic Journal reports.
Half of the parents considered doing so more important than preparing for retirement while 53 percent said they are willing to remortgage their properties to help their children achieve the dream of home ownership.
This comes as home prices in Hong Kong have risen 10 percent since the beginning of the year with the price index having increased for 17 months in a row.
The survey, conducted between Aug. 8 and 22, interviewed 1,010 Hongkongers, aged between 18 and 65, who are members of the Mandatory Provident Fund (MPF). Among the interviewees, 481 were parents.
While the survey did not reveal how many of the responding parents have helped their children with home purchases, it showed the money they have offered averaged about HK$900,000, with the highest being HK$10 million.
Based on the results, AIA MPF estimated as many as 80 percent of Hong Kong parents may have insufficient funds reserved for retirement.
As such, they will have to live their retirement life with HK$16,400 less every month on average if they don’t want to put off retirement, according to AIA MPF.
Professor Chou Kee-lee, chair professor of social policy at the Education University of Hong Kong who led the survey, said parents should not rush to use their retirement funds or mortgage their homes just to help their children buy homes, warning they could end up facing serious financial problems after retirement.
Stephen Fung Yu-kay, chief executive of AIA MPF, called on parents to think twice before making such a decision since there are still expenses to deal with after one retires, such as those for medical care.
In other survey results, most respondents saw buying a home as one of their most important goals in life. About 83 percent considered mortgage payments tantamount to saving money and 84 percent said owning a property is the best investment of all.
In addition, one in two responding parents said they help their children pay part of living expenses regularly, while 71 percent of the responding children find it hard to take care of their parents’ retirement life.
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