🏠 Ten things you must do before buying a property

The editor has personally experienced the pitfalls and will help you compile the most practical property purchase list!

Hong Kong people have a love-hate relationship with the phrase "buying a home." With property prices soaring, everyone says, "A roof over your head brings peace of mind." But buying a property isn't like buying groceries at the supermarket. With millions, or even tens of millions, of dollars on the line, a single decision can impact your entire life. I've seen countless friends make impulsive purchases, only to end up with overwhelming mortgage pressure or buying the wrong property, leaving them with bitter regrets. So, I'm sharing ten essential pre-buying tips to help you navigate your home buying journey and avoid becoming a "mortgage slave."

1️⃣ Assess your financial capabilities💰

Key Point: Find Out Your Real Affordability

• Income stability : Don't just look at the basic salary; consider bonuses and whether part-time income will be stable.
• Mortgage Stress Test : Banks and the Hong Kong Monetary Authority generally require mortgage payments to be no more than 50-60% of income. We recommend doing a stress test yourself. Imagine if interest rates were to increase by 2-3 percentage points. Could you still handle it?
• Living expenses : Don’t assume that you can afford it as long as you can afford it. You also need to set aside some money for daily living expenses, medical care, travel, and even raising children.

👉 Editor’s tip: Many people overlook “renovation costs”. Hundreds of thousands of dollars are a big deal, so be sure to set aside some money in advance!

2️⃣ Save the down payment🏦

Hong Kong banks generally require a down payment of at least 10%-20% for first-time homebuyers, depending on the property price and the mortgage ratio. For example, for a flat on the first floor costing HK$8 million, the down payment would be at least several million. Besides the down payment, you'll also need to prepare:

• stamp duty
• Attorney Fees
• Agent Commission
• Miscellaneous expenses (e.g. title deed registration fees, mortgage insurance premiums)

👉 Editor's suggestion: It's best to have an extra year's worth of savings in reserve so that you don't go broke immediately in the event of unemployment or a reduction in income.

3️⃣ Do enough research on the property market🔍

Don't just buy something based on what your friends say; do your own research:

• Location analysis : transportation, supporting facilities, school network, and future planning.
• Transaction records : Check the Rating and Valuation Department website for actual transaction prices; do not blindly trust real estate agents' statements.
• Rental level : If you plan to collect rent, compare the rental return rate.

👉 Editor's note: Many new developments use low-priced units as their "offering strategy" to attract attention, but in reality they mainly promote high-rise units with good views, and the prices vary greatly.

4️⃣ Understand mortgage arrangements📝

Most people who buy a house need to borrow a mortgage:

• Percentage : The first home purchase is generally up to 90%, and the second home purchase will be much lower.
• Contribution period : Up to 30 years, but it depends on your age.
• H-Loan vs. P-Loan : Compare bank offers, cash rebates, and interest rate trends.

👉 Editor's advice: Don't just look at bank advertisements. It's best to compare several banks, or even seek help from a mortgage broker. Even a few percentage points of interest may make a big difference.

5️⃣ Be clear about your purpose of buying a property🎯

• For self-residence : Consider living convenience, schools, and transportation.
• Investment : Consider rental returns and appreciation potential.
• Long-term plans : Will you get married, have children, and live with your parents in the future?

👉 Editor’s reminder: Don’t talk about investment today and living in it tomorrow. It’s easy to buy the wrong property if your purpose is unclear.

6️⃣ Property viewing tips 👀

• Building age : Buildings that are too old may face the problem of depleting maintenance funds.
• Orientation : Hong Kong is very hot in summer, so be careful when your unit is exposed to the west sun.
• View : Sea views and open views are nice, but you need to be aware of whether they will be blocked by new buildings in the future.
• Management fees : They vary greatly from one housing estate to another, so you need to calculate the monthly burden clearly.

👉 Editor’s experience: Sometimes, the management fees for cheaper units are actually more expensive than those for luxury homes, as there are fewer units but more facilities.

7️⃣ Prepare legal documents 📑

Buying a property involves many legal procedures:

• Provisional Sales and Purchase Agreement
• Formal sales contract
• Property Deed Registration

👉 Editor's advice: Be sure to find a trustworthy law firm to avoid getting into trouble in the future just to save a few thousand dollars.

8️⃣ Consider policy impact ⚖️

Hong Kong's property market is greatly affected by policies:

• Tough measures : stamp duty, additional stamp duty, buyer’s stamp duty.
• Mortgage stress test : limits borrowing capacity.
• Land supply policy : will affect future supply.

👉 Editor's reminder: Policies may change at any time, so be sure to check the latest arrangements before entering the market.

9️⃣ Reserve for renovation and miscellaneous expenses🛠️

Many buyers focus on the down payment and mortgage payments, but overlook:

• Renovation costs
• Furniture and appliances
• Moving expenses

👉 Editor's experience: A friend of mine didn't have a budget for renovations when he bought a house, so he ended up having to borrow money from his credit card. He had to pay off the mortgage and the credit card debt at the same time, which was extremely stressful.

🔟 Mental preparation🧘

Finally, the most important thing is psychological construction:

• House prices will not rise forever , we have to accept the possibility of price drops.
• Don't follow the trend . Don't just buy what others are buying.
• Buy a property within your means ; it's about improving your life, not sacrificing your quality of life.

👉 Editor's note: Buying a property is a major life event, not something you should act on impulse. Do your homework and you'll feel confident buying.

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🙋 Editor's summary:
Before buying a property, you really need to think carefully. It's not just about money; you also need to consider your life, family, and future plans. Do all ten things before making a decision. Don't rush, because buying the wrong property is more painful than buying an expensive one.