The core reason why it is difficult to buy a property in Hong Kong

Chapter 1:Hong Kong Property MarketCurrent situation and the core reasons for the difficulty in getting on a bus

1.1 History and Current Situation of Hong Kong Housing Prices
– Cities with the highest housing prices in the world: According to international surveys, Hong Kong has topped the list of “the most unaffordable housing prices in the world” for many years in a row, with a housing price-to-income ratio of more than 20 times (i.e. a family would have to save for 20 years before they could afford a house).
– Imbalance between supply and demand: Land supply has been in short supply for a long time. Government data shows that residential land in Hong Kong only accounts for 7% of the total area. Coupled with the high population density, demand far exceeds supply.
– Investment-driven: The low interest rate environment, inflow of foreign capital (especially from mainland buyers) and the concept of “bricks retain their value” have made the property market an investment tool rather than a simple residential demand.

1.2 Structural Problems of Difficulty in Getting on a Bus
- High down payment threshold: Taking 2023 as an example, there will be almost no “entry-level homes” in the city with a price below 4 million. According to the current mortgage policy (maximum 90% mortgage for first-time homebuyers), a down payment of at least 500,000 will be required to purchase a 5 million property, which will put a huge pressure on ordinary families.
- Strict stress test: Banks require buyers to pass the payment stress test after the “3% rate hike”, and the monthly income requirement is often more than HK$25,000.
– Policy restrictions: including additional stamp duty (SSD), buyer’s stamp duty (BSD) and ad valorem stamp duty (AVD), which curb speculation but also increase the cost of changing properties.

 

Chapter 2: Government Policies and Home Ownership Support Schemes

2.1 Preferential policies for first-time buyers
- High-ratio mortgage plan: First-time homebuyers can apply for a mortgage of up to 90% (maximum loan amount of 7.2 million) for properties below HK$8 million, and 80% for properties below HK$10 million.
– Relaxation of stress test: From 2022, first-time homebuyers who fail the stress test can still apply for a mortgage, but they will have to pay an additional premium.
– Stamp duty reduction: The stamp duty rate for first-time homebuyers is 1.5%-4.25% (15% for non-first-time homebuyers).

2.2 Public Housing Scheme
– Home ownership(Home Ownership Scheme):
– Sold at 50-60% off the market price, the average selling price of a Home Ownership Scheme Flat in 2023 is approximately HK$2.7 million (with a usable area of approximately 400 square feet).
– Application qualifications: Maximum monthly household income of HK$62,000 and asset limit of HK$1.47 million.
– The draw was highly competitive, with an average oversubscription of 30 times in 2023.
– Green Subsidy Housing Scheme: Targeted at public housing residents, the price is lower (about 40% off the market price), but resale restrictions are strict.
– First-time homebuyers: These are projects jointly launched by the government and developers. The prices are lower than the market price, but the supply is very limited.

2.3 Other subsidy measures
– Tenants Purchase Scheme: allows public housing tenants to buy their existing flats at a discounted price, but only in certain housing estates.
– Youth Hostel Scheme: Provides low-rent accommodation to assist young people in saving for a down payment.

 

Chapter 3: Financial Planning Strategies - Saving for a Down Payment and Improving Borrowing Power

3.1 Practical ways to save for a down payment
– Extreme Savings Method:
– Compulsory savings: Invest 50% of income each month into high-interest deposits or low-risk investments (such as bond funds).
– Reduce non-essential expenses: for example, give up eating out, share living space (rent a subdivided flat or live with family members).
– Investment appreciation:
– Monthly Stock Investments: Choose high-growth stocks (such as technology ETFs) or dividend stocks (such as REITs).
– High-interest deposits in virtual banks: Some banks offer current account interest rates above 4% (suitable for short-term savings).
- Family support: “Parental financial support for down payment” is common in Chinese society, but you need to pay attention to tax risks (if it is regarded as a gift, you may have to pay taxes).

3.2 Improving banks’ mortgage approval capabilities
– Increase stable income:
– Develop a side business (such as an online store, freelance work) and keep at least 6 months of income records.
– Switch to a higher-paying industry (such as finance or technology), or strive for a promotion and salary increase.
– Reduce debt ratio:
– Pay off credit card debt or personal loans and keep total debt/income ratio below 50%.
– Avoid guaranteeing other people’s loans.
– Joint purchase of a house:
– Apply for a mortgage jointly with a spouse or family member to combine incomes to pass the stress test.
– Pay attention to the allocation of ownership and future transfer costs.

 

Chapter 4: Gold Rush in the Property Market - Practical Skills for Finding Low-Priced "Starter Homes"

4.1 Target area analysis
- New Territories North:
– Fanling, Sheung Shui: HK$4-5 million can be used to purchase a 300 sq ft second-hand home ownership flat.
– Transportation: Relying on the East Rail Line, commuting to Kowloon takes about 40 minutes.
- Tuen Mun, Yuen Long:
– There is a large supply of new properties, and developers often offer high-ratio mortgages (such as breathing plans).
– Disadvantages: Long commute time for cross-district work and older community facilities.
– Urban subdivided flat renovation projects:
– Some old buildings in Kowloon City and Sham Shui Po can be priced as low as HK$3 million, but you need to reserve some money for renovation costs (approximately HK$200,000).

4.2 Second-hand market bottom fishing strategy
– Silver Master Plate:
– The price of the foreclosed property is lower than the market price by 10-20%. All cash bidding is required and the property cannot be inspected.
– Risks: Hidden repair costs or title disputes.
– Haunted House and Accident Unit:
– The price can be as low as 60% off the market price, but it is difficult to resell, so it is only suitable for self-use and those with strong psychological endurance.
– Building age and mortgage restrictions:
– Banks may reduce the mortgage loan amount (up to 60%) for properties over 30 years old, requiring a larger down payment.

4.3 New property offers and developer payment plans
– Immediate installment vs. construction period payment:
– Immediate installment payment: The property price is discounted by 5-10%, but the payment must start immediately.
– Payment during construction period: The final payment is only required upon taking possession of the property, which is suitable for continuing to save while waiting to move in.
– Second mortgage by developer:
– For the common “80% mortgage + 10% second mortgage”, the down payment only requires 10%.
– Risks: Second mortgage rates are higher (e.g. P+2%), and interest rate hike cycles may cause the mortgage payments to soar.

Chapter 5: Risk Management and Long-term Planning
5.1 Response to the Downturn in the Property Market
– Negative equity risk: If the property price drops below the down payment ratio (e.g. the property price drops by 15% after a down payment of 10%), the bank may require additional collateral.
– Interest rate fluctuations: During the US interest rate hike cycle, HIBOR (Hong Kong Interbank Offered Rate) may rise, resulting in an increase in monthly payments.
– Unemployment protection: Set aside at least 12 months of reserve funds, or purchase mortgage insurance.

5.2 Building replacement and asset upgrade strategy
– Buy first and sell later: Use the “sell property to cash out period” to avoid double stamp duty, but you will have to bear short-term funding pressure.
– Renting out your mortgage: Buy a second home and then rent it out; the rental income can offset part of the mortgage payments.
– Overseas asset allocation: Some buyers have turned to the property market in the Greater Bay Area (such as Zhongshan and Zhuhai) to reduce the risk of asset concentration in Hong Kong.

 

Chapter 6: Alternatives – Non-traditional ways to buy property

6.1 Nano buildings and shared housing
– Nano buildings (under 200 feet):
– The total price is as low as 3 million, but the living quality is poor and a discount is required when resell.
– Co-living:
– Such as Weave Studios, the monthly rent includes water and electricity, which is suitable for young people in the savings stage.

6.2 Overseas Property Purchase and Retirement Planning
– Greater Bay Area “Hong Kong City” Project:
– Zhuhai, Zhongshan and other places have launched special projects for Hong Kong residents, with prices being 1/5 of those in Hong Kong, but attention should be paid to the property rights period (70 years) and medical facilities.
– Immigration and property purchase:
- UK BNO visa, Taiwan investment immigration (6 million Taiwan dollars), etc., provide low-cost immigration options.

 

Chapter 7: Psychological Construction and Practical Cases

7.1 Successful onboarding case studies
– Case 1: A 28-year-old IT engineer with a monthly income of HK$35,000 made a profit of HK$500,000 through cryptocurrency investment. Together with HK$300,000 in financial support from his parents, he purchased a new property worth HK$5 million in Tuen Mun (with a down payment of HK$800,000).
– Case 2: A couple with a total monthly income of HK$60,000 chooses a home ownership flat in Yuen Long (60% off the market price), with a monthly mortgage payment of HK$12,000, accounting for HK$20% of their income.

7.2 Common Misunderstandings and Lessons
- Excessive borrowing: Ignoring the risk of interest rate hikes, leading to a "supply shortage" crisis.
– Ignore hidden costs: renovation costs, management fees, rates, etc. may account for 5% of the property price.
– Blindly chasing the rise: Buying expensive pre-sale properties following the trend, and suffering heavy losses when the property market adjusts.

 

Conclusion: Getting on a bus requires rational planning and timing

Although it is difficult to buy a property in Hong Kong, it is still possible to realize the "dream of owning a property" through policy dividends, financial discipline and market insights. The key is to act within one's means, avoid high-leverage speculation, and separate housing demand from investment attributes. As the government accelerates the development and supply of transitional housing in the northern metropolitan area, there may be more opportunities in the future, but buyers need to remain patient and flexible.

Home Ownership Scheme(English: Home Ownership Scheme), referred to asHome Ownership Scheme(English: HOS), is Hong KongSubsidised sale of public housingOne of the plans isHong Kong Housing AuthorityHousing units planned, planned and constructed by the Housing Authority are sold at prices below market value, andDeduct land price(from Phase 3B in 1982) sold to eligible applicants; the houses built under this scheme are generally known as "Home Ownership Scheme Flats". The Housing Authority also set up a Home Ownership Centre (HOC) to handle matters related to the Home Ownership Scheme starting with the launch of the first phase of Home Ownership Scheme in 1978.

Further reading:

• In-depth analysis of Hong Kong's property market policies in the 2025-26 Budget
• A 2-room apartment in Wai Wah Centre, Shatin, was sold in a flash. The investor made a profit of 10% in 5 months! Investors pocketed 362,000 yuan
• Observation of the 100-day "withdrawal" of the Hong Kong property market: the price reduction wave has started, and the pressure of destocking for rigid demand remains high