Crazy housing pricesHAN AE-RAN
The author is the head of the financial team of the JoongAng Ilbo.
“Actual size 721 square feet for HKD27.8 million.” “Actual size 1,282 square feet for HKD46 million.”
When I went to Hong Kong last August, I stopped to see the advertisements for apartment sales in a real estate agency. As I was not familiar with the Hong Kong dollar exchange rates and measurement system, I converted it.
The results were astounding. The small apartment of 721 square feet was for sale at 4.3 billion won ($3.6 million), and a mid-sized 1,282 square foot apartment was 7.2 billion won. They were not mansions with ocean views but ordinary units in downtown high-rise buildings. “I make USD10,000 per month but cannot afford to buy a home. Housing prices in Hong Kong are crazy.”
The Uber driver complained even before I asked. The driver, who seemed to be in his early 30s, repeatedly said “crazy” as the car drove by high-rise apartments along the harbor.
A Korean expatriate in Hong Kong said that there are newly married couples in Hong Kong who live with their parents separately because they could not afford a home together. When can they buy a home and live together? The answer was shocking. They can wait until one of their parents dies and inherit the house and then live together.
Recently, I read a posting on an online real estate community in Korea. Someone wrote that advice from a “master investor” turned out to be wrong. The investment master advised him “to have 3 billion won to give 1 billion won each to your children and prepare for retirement.” But “even if I give 1 billion won each to my child, they have to go to the outskirts of Seoul to buy a home, and I also need to sell my home and leave Seoul as well,” the author complained. He lamented that in the past, having 3 billion won in assets may be enough to prepare for a comfortable retirement, but now, it can only buy a Gangnam apartment.
What is the conclusion that the author wants to say? 3 billion won is not enough, so you should save up 6 billion won? Is it better to not have children when the housing price is crazy?