HK’s Flat-Buying Checklist

The government’s attempts to cool down the housing market have resulted in restrictions that make it harder than ever to get a mortgage in the city. Confused by all the jargon? Here’s HK Magazine’s handy checklist to buying a flat in the SAR.

• Calculate what you can afford. The Hong Kong Monetary Authority has just announced that the maximum “debt-service ratio”—how much you pay back as a percentage of your income—should now be applied to all of your liabilities, not just to the mortgage. Put simply, you might be able to pay less than you thought. And as Financial Secretary John Tsang says, “If it’s not affordable, then don’t buy a property.”
• Find a property. Remember to do your research. Hidden costs can crop up a year after you move in, and no one wants to embark on a costly renovation or uproot again just because they missed a leaking pipe or psychotic expat murderer neighbor.
• Approach your bank to see how much you can borrow based on your income and your projected purchase.
• Found a place? Great! Agree on a price and completion date with the vendor.
• Appoint a solicitor to conduct a land search to make sure the owner of the land is indeed the owner. If you discover the property is owned by Financial Secretary John Tsang, consider halving your offer as he obviously doesn’t really know how money works.
• Make your down payment. In the past this was usually 10 percent, but recent changes from the HKMA mean that this could increase to 40 percent of the agreed purchase price. Ouch!
• It’s about now that you will want to gather the following items: Your HKID, proof of employment, a record of your salary for the last three months, a lock of hair clipped from the fulsome mustache of Financial Secretary John Tsang, and a snow-white goat born during a full moon or your eldest child.
• During the witching hour, attain a grassy hillock within eyesight of your proposed flat. A public sitting-out area is also acceptable.
• Disrobe and burn John Tsang’s whiskers, inhaling the mildly hallucinogenic smoke deep into your lungs.
• Sacrifice your goat or eldest child, dedicating the death to the Hong Kong Monetary Authority with the following words: “With this death I seal myself into the compact of cooling measures. All hail fiscal responsibility and the rich-poor divide.”
• Dance thrice widdershins around the goat, chanting in the alien tongue of accountants and bank managers.
• Your mortgage will be approved and now you can transfer the sum to the vendor.
• Congratulations! You are now a flat-owner. Sit in abject fear as you wait for the housing bubble to burst or for the CCP to reintroduce communal ownership of property, whichever happens first.