Although the second-hand market will not be in a downturn recently, the continuous emergence of loss-making properties due to factors such as insufficient bank valuations and the rush of homeowners to immigrate has created a great obstacle to the improvement of second-hand property prices. With the poor market conditions in the general market, a bunch of “low-price” village houses have been put up for sale in the market, and many are looking for “5 balls” (5 million yuan).
For example, a village house in Hung Shui Kiu, with an area of 1,000 square feet, claims to be convenient for transportation, with bus and overnight minibus facilities, and the unit even has an independent parking space, solar energy and a star-gazing rooftop. 4.78 million yuan.
Buying a 1,000-square-foot village house for 4.78 million yuan sounds like a very good deal. I didn’t delve into whether it was a fake or not. There are also many village houses on the same site, with an area ranging from 550 to 700 square feet. The asking price is about 4 million yuan. , the price/performance ratio looks very high, but why is there no interest in it and has not been sold?
It is believed that one of the reasons may be that the public misunderstands that it is difficult to afford mortgages for village houses.
Another reason is that buying a village house is indeed more difficult than buying an ordinary private building.
Mortgage up to 85%
First of all, the mortgage-to-value ratio that can be afforded by buying a village house is lower than that of a private property, which was right in the past.
Taking properties below 10 million yuan as an example, 90% of the mortgage can be obtained for a private building; in the past, only 50% to 60% of the mortgage was available for a village house.
However, after the relaxation of mortgage insurance this year, the public can take out a mortgage of up to 85% for village houses with a property price of less than 10 million yuan.
In other words, assuming that the buyer is a first-time homebuyer, to buy the “cheap-priced luxury house”, the 1,000-square-foot village house in Hung Shui Qiao, at the price of 4.78 million yuan, the first phase is only 710,000 yuan.
And because the loan amount is small, even if the interest rate rises in the future, I believe that the pressure of monthly repayment will not be too great, and it will not be too difficult to pass the contribution-to-income ratio.
Be careful when buying a village house
However, the difficulty in obtaining mortgages for village houses is mainly due to many factors that are not common in other private properties, including whether the property has unauthorized construction problems, whether there are illegal constructions or alterations, etc. These factors will affect the mortgage approval work of banks.
On the other hand, in order to meet the needs of banks, buyers and their lawyers need to obtain a variety of documents to prove that the land and construction of village houses are in compliance with the procedures, so that they can be more easily approved by banks.
In addition, village houses often involve issues such as land rights, road rights, and property rights. Does the owner have the right to use the road, and does the land rights belong to the buyer? All of the above are issues that buyers need to deal with.
Therefore, the procedures for purchasing a village house generally take a long time. Buyers who have not checked the rights and interests should not rashly sell; otherwise, they may fall into the trap without knowing it.
There are other factors to consider when buying a village house, such as whether there is any restriction on resale of the house, and whether to pay the land premium? Does the property have documents such as plans, deed and title deed?
Once the lack of important documents, such as the deed, may be regarded as a non-deed building, it will be more difficult to apply for a mortgage.
Village houses also have to deal with sparse transactions, and there may be a problem of insufficient bank valuation.
Recently, second-hand housing transactions in Hong Kong have been sluggish, and bank valuations have become more conservative. If you want to buy a village house smoothly, you should first inquire with a mortgage referral company to understand the mortgage problem of village houses.
Further reading:Alibaba plans to apply for dual main listing in Hong Kong and the United States to be completed by the end of this year as soon as possible
Further reading:Tseung Kwan O Tian Jin owner “dropped the car” tragically lost 2.7 million new buyers to eat SSD: bamboo shoots
Join the One Patreon Fertilizer Program Now
15% off for a limited time!Save more with a year-round subscription
The new subscription plan content will be fully upgraded! Especially when the US stock market is speculating and the cryptocurrency is emerging, the economic week specially collects articles from experts in the industry to analyze and explain the dismantling context in simple terms.
15% off on Patreon for a limited time during the Economic Week! After subscribing to Patreon, you can also read columns and analysis of investment experts, as well as investment special reports.