Don't tax your pocket

| 17 May 2019

Henderson Land Development's general manager of sales, Mark Hahn Ka-fai, visited us in Tseung Kwan O last week. With him was senior deputy general manager Yim Sai-leung, who is a veritable walking encyclopedia in local property sales.

Yim joined the profession in the 1980s, and has taken part in marketing numerous major projects, including Taikoo Shing on the Island, and Well On Garden, the first private residence in Tseung Kwan O.

Many years ago when Oak Mansion, in the best section of Taikoo Shing, was put on the market, local home prices were not as high as today, but the US was raising interest rates.

As a result, mortgage lending rates surged to 21 percent per annum. To attract buyers, developers offered mortgage loans at the rate of eight percent.

That kind of rate, considered super low at the time, was of course still much higher than today's levels, which just shows how low financing costs are these days.

Over the years, Yim has seen seven up-down cycles in the local property market, and some novel marketing tactics too.

One example was the "100 percent mortgage takeback" offered by the vendor to stimulate sales when Well On Garden was put on the market during the post-handover era when home prices were free-falling amid a 85,000 flats per year policy.

But under this arrangement, buyers theoretically wouldn't have to pay anything when they make the purchase. How then would they make the down payment?

Yim laughed and said that was, indeed, a tricky issue that many people had found vexing. The answer: buyers are required to pay the first repayment installment on the original deposit amount.

There are ups and downs in the property market. When it is in the doldrums, buyers need only to sign their names to make a purchase, which must seem like an impossible dream in a red-hot market, like now.

Some people would hold off buying in a booming market to wait for a downturn. And when prices actually came down by 10 percent, they gloated about their foresight, but still wouldn't buy, thinking prices would come down further. But they could end up missing another home-buying boat.

Drawing on experience, Yim advises buyers to look at their own financial situation instead of trying to predict market ebb and flow. So long as you don't need to overstretch to make mortgage repayments, it's a good time to buy.

Siu Sai-wo is publisher of Sing Tao Daily

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