Q & A with our experts

Q: I have visited a number of flats recently and most owners are asking for crazily high prices. Is it the right time to buy or better to wait for the next market correction? With a budget of HK$6 million to HK$7 million, I am targeting Wan Chai, Quarry Bay and Sai Wan Ho. Which district has the best upside potential?

A: Residential prices are likely to go on increasing unless the government introduces drastic measures to suppress demand. Whether you should enter the market is difficult to tell because buying a home is a long-term decision and depends on your own needs. If you have that budget, Wan Chai should be a top choice as the area enjoys greater upside potential. Flats in the area can fetch monthly rents of HK$40 to HK$50 per square foot, compared with HK$20 to HK$30 in Sai Wan Ho.

Richard Lee Chi-sing is chief executive at Hong Kong Property Services (Agency)

Q: The flat I am living in now has appreciated by HK$2 million. The outstanding mortgage loan is HK$600,000, and the current monthly instalment is HK$3,000. We plan to apply for an additional refinancing loan of HK$700,000 to finance the purchase of a bigger flat, which is worth HK$5.4 million, in Tsing Yi. After the purchase of the Tsing Yi flat, the monthly instalment will be HK$14,000. Is it a risky move or should we wait for property prices to go down?

A: Job security and whether it is easy to find a tenant for the existing flat are two major considerations for the move. It is worth drawing up a risk assessment, such as whether not having any income for a year or rental income from the existing flats for six months will cause any financial problems for you. You also need to go through a stress test by banks before you can secure a mortgage for the second flat. At present, there are no fundamental reasons for a sharp decline in property prices. In this case, risk management is the more important consideration.

Louis Ho is a director at Centaline Property Agency

Q: Several new property projects are going on sale this week. I have a budget to invest in a property worth HK$6 million to HK$7 million. I'm flexible in location as long as it generates a better return.

A: With this budget, there are limited choices on Hong Kong Island. But you can get an 800 to 900 sqft flat at The Reach in Yuen Long. The project is believed to be going on sale this week. Prices in Yuen Long have outperformed the market in general due to the improved infrastructure in the area. Another choice is Providence Bay in Tai Po, which has the potential to become the second Residence Bel-Air in Pok Fu Lam. But investors in this project need to take a long-term view.

Sammy Po is a director of Midland Realty in the New Territories