Concrete Analysis | Is this the right time to buy a home in Hong Kong? Bargain hard instead of waiting for further correction
- JLL’s Cliff Tse says look to satisfy three conditions – timing, location, holding power
- You should own your home for a long time, so ability to cover mortgage is paramount
Is now a good time to buy an apartment? Many people have asked this question, and as we step into 2019, this is a good time to reflect on it.
The property market in 2018 was a roller-coaster – due to an encouraging sales response to new projects, the first half was fuelled with positive sentiment. As a result, the mass residential index surged by 9.8 per cent in the first eight months. However, when it encountered market uncertainties, market sentiment turned sour momentarily, and the whole-year price growth narrowed to 5 per cent only.
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Experts always say property is about location, location, location. But if I were to buy an apartment to live in, I would look to satisfy these three conditions instead – timing, location, holding power.
Having observed the ups and downs in the past two decades, it is still not easy to predict how the market will go. According to the JLL research department, the mass residential price index has gone up by 198 per cent so far, from a trough in 2009 until now. And it is widely expected that property prices will drop further, from a peak in August 2018, before they bottom out.
Shall we wait? If I were able to locate an apartment that matched my preference and budget, instead of waiting, I would rather bargain for a deeper discount to absorb this expected adjustment.
The choice of location depends on each buyer’s pursuit, such as ease of access to the workplace, tranquillity, neighbourhood, etc. And since Hong Kong’s transport infrastructure has improved a lot, some traditionally remote locations have become accessible by the MTR or public transport. However, we should be alert about areas where high volumes of supply will become available in the coming years. Developers’ pricing strategies for new projects will more or less impact the prices of secondary apartments nearby, although developers always say they refer to these prices when they set their price lists.
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