• Fri
  • Dec 19, 2014
  • Updated: 12:00am
My Take
PUBLISHED : Tuesday, 22 July, 2014, 5:25am
UPDATED : Tuesday, 22 July, 2014, 6:07am

Why bother inspecting a Hong Kong investment flat?

Would you buy a flat without inspecting it first? Many in Hong Kong would say yes, provided you don't plan on living in it.

In the same way that stock punters buy company shares without researching too much, many flat buyers now queuing to get their hands on Cheung Kong's Mont Vert development don't mind not seeing the inside. The development in Tai Po offers some of the city's cheapest - and smallest - new flats. Measuring under 200 sq ft and sold for under HK$2 million, the studio units may be quite unliveable except for single people, but they are at least affordable. There are also larger two- and three-bedroom flats.

There is pent-up demand for flats, especially since the introduction of "spicy" measures such as the doubling of stamp duty, which artificially depressed the number of transactions without pushing down prices, and with lots of money sitting on the sidelines. So regulators can scream and shout; it's business as usual for everyone else. Long queues formed over the weekend at the Fortune Metropolis mall in Hung Hom, where Cheung Kong was marketing the Tai Po development.

Prospective buyers had to sign a "no-viewing agreement" because the company said flats were still being completed and it would be unsafe to take people to the construction site. This has upset the Sales of First-hand Residential Properties Authority. Under the Residential Properties (First-hand Sales) Ordinance, developers are required to let buyers see the flats. Cheung Kong did provide two model flats at its sales office in Hung Hom, but not at the site. We all know those models look nothing like the real thing. Are people being ripped off? Justin Chiu Kwok-hung, executive director at Cheung Kong, said people could always delay their purchase or not buy at all if they didn't like the arrangement. Fair enough!

People are not stupid. When you buy a flat in Hong Kong, you buy its investment value. People are betting the flat's value will go up or at least be preserved; they expect to be rewarded with higher equity, rather than larger space as you would normally expect in overseas markets. In other words, you own flats that are worth more, but not necessarily getting bigger. So unless you want to live in it, why bother inspecting it?

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This article is now closed to comments

raglan
"People are not stupid....."
Yes they are, the assumption that prices will go up forever is an unsafe one, especially in NT where's there's abundant land, all it takes is another, or two, or three new developments near Mont Vert for prices at this place to depress....Secondly, Cheung Kong flats aren't famous for their quality, anyone in the building and renovation industry will tell....
rvto
Yes, but you not inspect it in the kitchen before it is served.
syn
Those are the most expensive bread boxes I've ever seen.
pragmatist
Sure, gamble on. Forced to as thwre is no other way to make it in HK with perpetual asset bubble.
HK_eh!
how do you make sure no one is going to live in it? they can still be rented out.
I think you're trying to be sarcastic to highlight the fact that no one with common sense would buy these flats except to speculate on the property market as the absolute price is affordable ($2M)
All flats need inspection, unless the owner signs a waiver that no rental, and no plans to live there.
Good luck.
Ant Lee
this article is the most stupid and ignorant I have read in the past few years.
asiaseen
You can't have read very much then.
pragmatist
You are so funny.
KwunTongBypass
...."We all know those models look nothing like the real thing".... are you suggesting that Cheung Kong is cheating? tsk tsk
You can always take a measuring tape to the model flat to check, no?
By the way, I assume that a bed of 1.9 meter is standard for shorter Hong Kongers (elsewhere it is 2.0 meters). If you call my comment racist do not forget that Cheung Kong then is so by implication.
dascaldasf
Would anyone order food in a restaurant without looking at the menu?

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