Wealth Blog

Shoebox defeat

PUBLISHED : Wednesday, 17 October, 2012, 9:01am
UPDATED : Wednesday, 17 October, 2012, 9:50am

It’s time to chuck in the towel on the shoebox front. Weeks of traipsing around the seedier corners of Wan Chai, Tin Hau and Sai Ying Pun have proved one thing. Small flats are ridiculously expensive and anyone who buys one now needs their head examining.

This does not mean they will not continue to go up in price; however, just that anyone who buys now is mad. Fed up of being told I am going to see a 400 square foot gross unit at a reasonable HK$3m, it turns out to be less than 300sqft net, be on a pitch black first floor unit overhung by several crumbling buildings and deafened by the backsides of a 40 storey block’s air-conditioning compressors. Forget it.    

It seems everything is similarly priced – 200sq ft (real net usable space, not the fantasy gross measurement) is $2m, etc, and 250, $2.5m. Then most of them are already tenanted and cannot be viewed. Rental returns vary between $7,000 per month to about $9,000 so that’s not even a great yield. So, dispirited, it was time to head for the islands. Off to Lantau, where surely the power of the Yummy Mummies of Discovery Bay to inflate village house prices could not have filtered down to shoebox flats in the blocks by Mui Wo ferry pier.

Wrong again. There was the nice one tiny bedroom 400 sq ft unit with a section of roof all to itself. Very nice but over $2m. And a five storey walk-up, no lift. No thanks. In sleepy Mui Wo?  Oh yes, said the agent, very popular now. No one can afford Hong Kong Island, so they’re all coming over here.  More promising was an open plan 446sq ft – usable space much less - asking price $2.7m. This one had a lift, but what would it rent for? About $7,000 a month, the agent said, very popular and easy to lease, she added. A 496sq ft flat nearby was $3.9m, one in the same block with a sea view just rented for $12,000 a month. Its’ only a couple of years ago that little Mui Wo units of 350sq ft changed hands for $750,000. And rented for about $3,000 a month.  But now it seems Mui Wo prices are fast catching up with Hong Kong Island.

The world has gone crazy. So the shoebox is on hold for now - it’s back to high yielding blue chips that pay a reliable dividend. The share price may fluctuate but the roof won’t leak.        


3 forgiven – pending

I take it all back. Yesterday’s expensive phone moan about the ridiculous hoops to be jumped through in securing an iphone 5 has been resolved. But I’m not holding my breath or speaking too soon. I thought, last Saturday, I had successfully reserved an iPhone 5 White & Silver -16GB, whatever that means, for which my wallet will be lightened to the tune of HK$6,000 or so I believe. But diluted over monthly bills it will hurt less, or course.

Anyway, 17 fruitless minutes followed yesterday, trying to track my new toy’s progress. During this tortuous phone call I was told variously that I had registered a wrong number, the system had a problem and then finally that I was in a queue for the iphone 5 – which I knew already. They were still not able to tell me when I would actually get the wretched thing. I was told that “Our Cynthia” would contact me, at her convenience, within 48 hours.  So I was surprised when a chap rang me today with the glad tidings that my white and silver iphone 5 would be ready for collection at the 3 shop in Hutchison House on October 19th.

So soon! Just as I was congratulating myself on the value of picking up the phone and pursuing these things after all, a friend laughed and said no wonder it would be ready so soon. “No one wants the girlie white ones, they’re easy to get. Everyone wants the cool black ones.” Suitably crushed I consoled myself. I had donated quite enough expensive black mobile phones to the back seats of taxis and it was time to face reality and forget vanity – white phones are much harder to lose.

But no crowing yet. It has yet to arrive at the shop and be collected. If only we could just go back to the days of walking into a shop and buying things that are actually there on the shelf.