Q:I have saved about HK$500,000. I want to use it for the down payment for a mortgage on my first home. Where can I find properties priced slightly over HK$2 million? What are the options?
A: With a down payment of about HK$500,000, given the fact that you can borrow up to 80 per cent of the value of the flat, you could afford a property priced at between HK$2.5 million and HK$3 million. There aren't many choices with such price tags on the market right now. One option is Kingswood Villas, in Tin Shui Wai, where secondary flats sized at about 500 sq ft sell for between HK$2.3 million and HK$2.8 million.
If you want to find a flat in an urban area, you have to look at flats that are about 200 sq ft in size. For instance, small units in San Po Kong are priced at around HK$7,000 per sq ft in terms of gross floor area and their total cost would be from HK$2.2 million to HK$2.3 million. Flats in urban areas may have higher appreciation potential but some people may like living in housing estates with a clubhouse. Alternatively, you could consider the Home Ownership Scheme flats in Tuen Mun.
Patrick Chow Moon-kit is the head of research at Ricacorp Properties
Q: I plan to buy a three-bedroom flat. But I'm worried mortgage rates may continue to rise. Is it safe to measure my affordability based on a mortgage rate of 5 per cent?
A: It should be safe to measure affordability based on a mortgage rate of 5 to 6 per cent. As long as interest rates in the United States stay low, I don't think local banks will raise home lending rates sharply. The rise in rates last week was due to the government cooling measures. It is difficult to forecast interest rates movements in the US and local mortgage rates could increase sharply if US rates begin to rise. In the 1980s mortgage rates reached about 20 per cent, and in the 1990s they reached more than 10 per cent. I don't think US rates will begin to increase until the middle of 2014.
Sammy Po Siu-ming is a director at Midland Realty
Q: I currently co-own a flat with my parents. If I were to buy a new flat would I be liable to pay the doubled stamp duty? Should I postpone my buying plan?
A: You will have to pay the doubled stamp duties no matter what percentage of your co-owned flat you hold. But if you want to avoid the stamp duty levy, you can sell your ownership before or after you bought a new flat in six months.
David Chan Tai-wai is a director at Ricacorp Properties