The future of mortgage market
The property market in Hong Kong has been booming since 2003.The average property price rose by 40-50% in these few years. For example a 600-sq ft apartment located in Aberdeen, which was priced at HK$1.5M in 2003, is now sold at HKD2.3M. The boom in the property market is mainly due to the recovery of HK economy, marketing strategy and luxury apartment concept of the developer as well as the suspension of the Home Ownership Scheme by the HKSAR.
The average monthly household income of Hong Kong families (households is a better word than families) is about $25,000. Generally speaking, each of us spends about 100 times (yes, but a better definition would be 40% of our monthly income goes towards housing costs, as you state below) of our monthly income on home purchase. That’s why most of home purchases request mortgage financing through bank or other financial institutions.
According to the HKMA statistics, housing expense consumes about 40% of the household income. The rest (other) part of the income is used for food, transport and other daily utilities. It is hard for the working group to save a large sum of money for raising children and retirement life. To cope with the low birth rate and ageing population, the government should implement new policies and measures for the population planning in a long run.
The property market in Hong Kong has been booming since 2003.The average property price rose by 40-50% in these few years. For example a 600-sq ft apartment located in Aberdeen, which was priced at HK$1.5M in 2003, is now sold at HKD2.3M. The boom in the property market is mainly due to the recovery of HK economy, marketing strategy and luxury apartment concept of the developer as well as the suspension of the Home Ownership Scheme by the HKSAR.
The average monthly household income of Hong Kong families (households is a better word than families) is about $25,000. Generally speaking, each of us spends about 100 times (yes, but a better definition would be 40% of our monthly income goes towards housing costs, as you state below) of our monthly income on home purchase. That’s why most of home purchases request mortgage financing through bank or other financial institutions.
According to the HKMA statistics, housing expense consumes about 40% of the household income. The rest (other) part of the income is used for food, transport and other daily utilities. It is hard for the working group to save a large sum of money for raising children and retirement life. To cope with the low birth rate and ageing population, the government should implement new policies and measures for the population planning in a long run.
Reverse mortgage is a mortgage product that enables senior homeowner to convert a portion of their home equity into cash. Proceeds can be in the form of a lump sum, a line-of-credit, or a monthly income. The homeowner does not make monthly payments and any borrowed funds are not repaid until the home is sold, vacated or upon death of the last surviving borrower. Title to the property remains in the name of the homeowner. Reverse mortgage is popular in US, UK and Canada as the elderly can receive steady amount of income during the retirement period. Similarly, there is a potential need for reverse mortgage in Hong Kong and will become a mainstream of the future mortgage market.
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