Post the “Brexit” referendum in the UK and the subsequent fall in value of the pound the market for UK property in Hong Kong has really come to life with many families opting to take advantage of the exchange rate and secure a home at a favourable relative cost but as a buyer what do you need to be aware of in the current market?
1. Stay true to the fundamentals - buy from a reputable developer through an established agent and purchase a property you believe fits your goals, be that investment for yield/capital appreciation or indeed a future home for yourself or one of the family. Don’t make a purchase simply because it’s there, there’s a wide variety of product available and now more than ever is the time to purchase what’s right for you.
2. Think long term – property is always best viewed as a long term asset and while recent market movements may have afforded some short term gains now is the time to think long term. As an investment 5 years is a good base for comparison and think in terms of what that property will deliver over that period or longer. Infrastructure investment, wider regeneration schemes and additional investment the surroundings to your property can all help with value uplift over time so make an assessment based on the future in addition to what’s there right now.
3. Buy a home you love – there has never been a better time to focus on what you truly aspire to own with relative costs to foreign purchasers reduced and a less active domestic market meaning more flexibility from developers. Now may be the time to buy your dream home in the UK.
4. Consider your borrowing position carefully – the UK’s record low interest rates have meant there is a very competitive mortgage with some attractive rates (such as 5 year fixed interest from 2.14%) available however lenders are countering this with a more risk adverse approach often looking for increased equity from borrowers. Research your position carefully prior to committing to a purchase, what applied one or two years ago may have changed.
5. Keep your options open – in the past Hong Kong buyers have looked for the first units in the newest schemes however we are seeing an increased interest in older stock from canny purchasers who know this is where good deals may present themselves. In a flatter market with low interest rates it may be a property newly complete or close to completion can offer an equal appeal to the first unit to sell on the newest schemes as buyer look to take advantage of low interest rates, forex gain on equity or a combination of the two.
Overall I would conclude it’s a great time to be in the market as a purchaser with a wide variety of stock available, forex gains on hand and often a little developer flexibility making for an attractive proposition. Have fun shopping around but when the right option comes up be sure to move swiftly, there are many other astute investors at home and abroad going through the same process.
The article was published in The Standard, 28 October 2016.
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