Owning a 236 sq ft unit still better than paying never ending rental, right?

Owning a 236 sq ft unit still better than paying never ending rental, right?

In a property market where both property price and rental is high, a good option may be to buy a unit to ensure some parts of the money we pay every month belongs to us instead of all 100 percent going to the home owner. A good option does not mean everyone would do it because sometimes, when the rental is just not high enough (because there are many desperate condo owners) or that property price is still reachable (so I can wait first lah), then people will rent lah.

In some countries however, rental is high enough to motivate buyers to buy as soon as the price is within their reach. Here is one such country.

Article in msn.com. Sun Hung Kai Properties (SHKP), Hong Kong’s largest developer by market capitalisation, on Saturday saw homebuyers flock to its latest residential project in Kai Tak, the city’s former airport, on the back of the recent interest-rate cut and stock market rally.

As of 7pm, the developer had sold 204 flats out of the 300 units on offer at Cullinan Sky Phase 1, according to agents. Under this project’s sales programme, the 204 units were snapped up based on their price list, while 96 were up for tenders. The units up for tenders have not yet been awarded.

The 204 units up for sale include two-bedroom flats, which measure from 236 sq ft to 559 sq ft. The price after discount has been set between HK$4.74 million and HK$12.28 million, or HK$17,015 to HK$24,284 per sq ft. The batch by price list is valued at more than HK$1.7 billion. Full article here: Article in msn.com

236 sq ft versus a car parking space?

A typical car parking space is 8ft x 16ft. This is the minimum size. Thus, a typical car park space is 128 sq ft. 236 sq ft is an extra 100 sq ft. This is enough space to park a Perodua Kancil (do google if you do not know what model is this). The price as mentioned in the article is HK$4.74 million for a 236 sq ft apartment unit. To convert into RM, based on current exchange rate this HK$4.74 million becomes RM2.63 million.

This is a price which is attractive enough to attract a lot of buyers in Hong Kong. How much is the typical repayment if we use 10 percent downpayment as typical?

If they do not wish to buy but prefers to rent instead?

Typical rental as below:

Conclusion

With such rentals, as long as the buyer is able to pay a higher downpayment, the monthly repayment is likely to be equal to the rental and the unit will belong to the buyer versus paying rental for 30 years, pay an amount which is almost equivalent and yet at the end of the day, only the owner will become rich. Now, do we not wonder why even at a price of RM2.63 million per unit, the sales are still able to proceed? I am grateful that I do not have such issues here in Malaysia.

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