Q & A with our experts, July 3, 2013
Q: I began renting a three-bedroom flat at Bel-Air in Cyberport with a car parking space for about HK$60,000 a month two years ago. My lease will expire in October. I hear there are more flats available for lease and rents are falling as property sales are not active.
I plan to renew the lease. By how much should I ask the flat owner to cut the rent?
I don't think the flat owner would reduce your rent as they have, in fact, risen. There were about 100 leasing transactions at luxury housing estates in Cyberport, Ap Lei Chau and Aberdeen last month. Transactions at Larvotto in Ap Lei Chau and Marinella in Aberdeen were very active and this shows leasing demand is strong. The flat owner may raise the rent by 3 to 5 per cent.
The housing estates are similar. You could select from any depending on your needs. The market will be driven by government policies over the next few years. The cooling measures are targeting luxury properties worth more than HK$10 million, whereas house prices in the New Territories cost around HK$1 million and are not the target of cooling measures and have suffered the least. The measures also affect new flats and luxury residential properties the most. It is still a good time to buy a flat if you buy it for your own use and are able to afford the down payment and monthly mortgage expenditure.
It is impossible to predict future property price movements with certainty. It is true that prices are currently high, but interest rates are low and new housing supply remains limited. Prices are unlikely to drop sharply in such a situation. If you sold your only flat, you would be at risk of being unable to buy a new flat at a similar or lower price. I have many friends who sold their flats a few years ago and planned to buy again when prices dropped. However, prices continued to go up and they had to pay more to re-enter the market. You could consider selling if you owned more than one flat.
