Tuesday, 8 November 2016

Housing Worlds Apart

The luxury development Mount Nicholson on The Peak
Last Friday, the Hong Kong government made a surprise move when it raised the stamp duty on real estate for non first-time buyers to 15 percent in a bid to curb property prices.

But it seems buyers have found a way to circumvent the tax -- by putting their multiple flat purchases into one agreement.

It happened on Sunday when one man, considered a first-time buyer, purchased four flats at Met Bliss project in Ma On Shan for a total sum of HK$19.93 million.

Because all four units were put under one agreement, he was able to avoid paying HK$1.6 million in levies.

And then today two adjoining luxury flats on The Peak were sold for a whopping HK$912 million, or HK$104,803 per square foot, making it the most expensive price for a flat in Asia.

The deal is for two flats at Mount Nicholson for a total area of 8,702 square feet and includes three parking spaces.

Entrepreneur Sandy Wong rents out capsules in Hong Kong
The selling price beats out the previous record set in 2015 by 39 Conduit Road in Mid-Levels for HK$103,762 per sq ft.

"Rich families are most concerned about the prestigious location and quality of the project, not the stamp duty," says Thomas Lam, head of valuation and consultancy at Knight Frank.

"Investors buying small to medium-sized units will be hit hardest by the latest property tax, but not the richest [investors]," says Lam.

Of course. Stamp duty to them is part of the cost of buying the property in the first place.

But these people are living on another planet compared to the rest of us, some of who are perpetually saving because real estate prices keep going up and salaries are not keeping up with inflation.

Or perhaps you should give up dreams of trying to buy a flat and live the minimalist life in a capsule?

An enterprising man from Guangzhou has rented out flats where each person can rent a capsule space of only 2 metres long and 1.1 metres high, about 25 sq ft.

A government brownfield site in Wang Chau, Yuen Long
The monthly rent ranges from HK$2,800 to HK$4,500 depending on the location. All the occupants have to share the bathroom, kitchen and common area.

Sandy Wong says he has received a lot of inquiries, and many of the renters live far from their workplace, or maybe their home is being renovated, or they've had marital problems and need a space to live in temporarily.

These "space capsule" homes are inspired by the Japanese capsule hotels, but those were for salaried men who missed the last train and just need a cheap and clean place to sleep in for the night. These are for renting monthly.

Is it me, or is the Hong Kong housing market completely out of hand now?

And yet the government doesn't want to do anything to disturb the rural strongmen who are occupying government land in the Wang Chau that could house some 13,000 people...

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