tag:blogger.com,1999:blog-25714039.post8172856136997498226..comments2023-10-26T00:17:28.411+08:00Comments on A Private Portfolio: HK Property Prices Still Risingtraineeinvestorhttp://www.blogger.com/profile/05179861120801348035noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-25714039.post-63848672981673321122007-11-21T10:35:00.000+08:002007-11-21T10:35:00.000+08:00Hi Trainee,Regarding tax, if you live in your prop...Hi Trainee,<BR/><BR/>Regarding tax, if you live in your property you can claim up to $100,000 deduction p.a. Coming out of your top bracket (at 17%), that's $17,000 of tax savings per year, about $1400 per month, which is certainly not bad and often makes property cash flow positive (when you factor in the savings in rent). So there is the double bonus of positive cash flow and capital gains. And I thought that Kiyosaki's claims of having both were just marketing spin. (There's no way you're going to get positive cash flow in Australia right now).<BR/><BR/>Indeed property is addictive. This is my second one (I have one back in Australia). Buying is always a very stressful experience , at least for me. But the satisfaction of having new property (not to mention the profits) is worth it!<BR/><BR/>For this reason I still have a big preference for property over stock. It's a much bigger motivator. Plus you get the gearing without needing to worry about margin calls.<BR/><BR/>I'd like to buy another one ASAP but I need another 6 months at least to get the cash reserves up to a comfortable level :)<BR/><BR/>My girlfriend (who is from HK) has a property that has gone up substantially over the past year. She's thinking of moving in to a cheaper place and renting out her apartment (so she can give more money to her mum each month, they take filial piety to a new level here!!!).<BR/><BR/>Anyway, I'm trying to convince her to refinance her existing place and use the cash as a downpayment for another cheaper place. She'll end up better of in terms of cashflow, and with a greater exposure to the market (for better or worse). Still trying to convince her, I guess not everyone is as huge a fan of leverage as me :)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-25714039.post-45356961724099895522007-11-20T20:33:00.000+08:002007-11-20T20:33:00.000+08:00Hi RaphaelCongratulations on your purchase. Sounds...Hi Raphael<BR/><BR/>Congratulations on your purchase. Sounds like a good deal.<BR/><BR/>Although I remain bullish on HK property (for the reasons set out in my post), I would regard 20% pa for the next two years as being an aggressive target (which has not stopped it happening before either in Hong Kong or other markets).<BR/><BR/>On interest rates, the drop in the margins makes new mortgages cheaper than old mortgages. Some of mine are getting to the stage where refinancing would pay.<BR/><BR/>I tend to ignore the tax aspects in Hong Kong. The tax rate is so low and the range of deductions is so limited (unless you buy through a company), that I tend to ignore that factor in Hong Kong. <BR/><BR/>Are you going to buy another property? It can become rather addictive :-)traineeinvestorhttps://www.blogger.com/profile/05179861120801348035noreply@blogger.comtag:blogger.com,1999:blog-25714039.post-24697403151387639402007-11-19T15:48:00.000+08:002007-11-19T15:48:00.000+08:00Hi Trainee,I just bought a property myself in Kenn...Hi Trainee,<BR/><BR/>I just bought a property myself in Kennedy Town. I paid 3.6M for a 2 bedroom place and was amazed to get a call from my agent about 3 weeks after signing the S&P with an offer of 4M from another buyer (prior to settlement!). I could have flipped it, but having already paid stamp duty, and being more of the buy and hold type I decided not to.<BR/><BR/>Anyway, I agree that with interest rates so low property will continue to rise over the next few years (I've heard predictions of 20% p.a. for the next 2 years in the general market). With the US in a bit of a bind, it's kind of forced to keep interest rates low to prevent their economy from going into recession. This in turn forced HKMA to pump liquidity into the system to keep the HKD in line with the USD, and bingo, rates have come down again.<BR/><BR/>BTW interest rates for residential properties are now about 4.1%, although if you'd signed about a month ago (when the discount from prime was larger) you could get as low as 3.93%.<BR/><BR/>Pretty amazing given that rental yields are around 5%, not the mention the tax advantage :)Anonymousnoreply@blogger.com