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Showing posts with the label Hong Kong property mortgage

How much above bank valuation to pay for Hong Kong property

I was sent an email today by a reader of my blog who wants to buy an apartment on Park Island and is finding that every apartment for sale is at a minimum 15-20% above the valuation offered by banks for mortgage purposes. My advice to him, was that this phenomenon is not only something that happens on Park Island. In Hong Kong, in a "rising market" it is in fact the norm that when you buy a place it will usually be at a price 10-15% above bank val. There are many reasons for this, but basically the banks are somewhat conservative, and also use valuation figures of transactions that closed 2-3 months ago. Since I have been in HK since 1997, its always been that way. The potential buyer was looking at an apartment offered at 5 million for 712 square foot. He told me that HSBC values it at 4.4m and Bank Of China values it at 4.52m, and wanted to know if 5m was a "fair price". My advice on this is as follows: Some “local banks” will give it a slightly higher valuatio