With Hong Kong flats out of reach, young buyers seek home ownership in Thailand, Japan

Tang Ying-ying, 26, became a proud property owner six months ago without breaking a sweat when she bought a flat in Bangkok where it costs just one-tenth of that in Hong Kong, joining a growing number of young Hongkongers who are investing overseas.

“There is zero chance for young people like me to buy a flat in Hong Kong,” said Tang, who earns HK$20,000 (US$2,560) a month at a logistics firm.

It will take her 21 years even without spending a single cent of her current salary to buy the cheapest flat in Sham Shui Po, two MTR stations away from her parent’s home, where a 261 square feet studio flat at Astoria Crest currently on sale costs HK$5.11 million, or HK$19,579 per square foot.

“My income will never catch up with the galloping home prices in Hong Kong,” she said.

That is when she decided to buy a flat in Bangkok, which she visits twice a year.

“I bought a 300 sq ft studio at the Excel Groove development located next to a BTS Skytrain station for HK$650,000. The developer has assured six per cent rental income for the first five years,” she said.

The scheme will fetch her HK$180,000 in rental income during the first five years, which she believes is a good deal.

After a site visit, she put down a 30 per cent down payment, or HK$195,000 without taking a bank loan. The outstanding balance will be paid when the flat is ready in late 2018.

“I have friends who have bought their first homes in Thailand or Japan, instead of waiting for Hong Kong home prices to fall to affordable levels,” said Tang who moved back to live with her parents in a 300 sq ft flat in Cheung Sha Wan after rents rose beyond her affordability.

Hong Kong home prices are expected to increase a further 10 per to 20 per cent in 2018, making it even more difficult for the younger generation to get on the housing ladder in the already world’s least affordable urban centre. The city has been ranked the world’s least affordable to buy a home for the seventh year running by the Demographia Housing Affordability Survey, with flats on average costing over 18 times the annual median income.

Besides Bangkok, Tokyo and Osaka in Japan are also hot destinations for other richer young investors.

Louis Choi, 35, bought a 215 sq ft flat in a 39-year-old building in Suginami, in Tokyo, for HK$700,000.

“Even that amount is insufficient for the initial down payment for a tiny flat in Hong Kong,” said the finance industry professional who earns HK$50,000 a month.

The unit has been rented out to a university student, which will bring a five per cent annual yield, said Choi, who lives in a 250 sq ft home in Cheung Sha Wan he bought for HK$2.5 million in 2014.

Gordon Tse, managing director of TY-Property in Hong Kong, which specialises in selling Japanese property, said most of the young buyers target flats that cost about HK$1 million.

Given the currencies in the region have fallen about 20 per cent, buying a flat seems more affordable.

“Flats in non-core areas in Tokyo similar to Hong Kong’s Sha Tin will still have units on offer for about HK$1 million,” he said.

“We sell as many as 40 flats a month, almost double from three years ago. One-third of them are bought as holiday homes as the buyers travel to Japan five or six times a year,” he said.

Hong Kong investors were now spreading their investments away from pricey areas in Tokyo to more affordable cities such as Osaka, Okinawa and even Hokkaido, he said.

“One of our clients has bought 20 units in different cities and offers them for leasing. Some investors have started to buy retail shops, which cost about HK$1 million to HK$1.5 million each,” said Tse.