The Game
In early March, I experienced my first taste of Hong Kong's real estate fervor, no matter if it's just the tail end of the boom. I went to visit the "Show Flat" (the sample apartment) for Cheung Kong's yet-to-be-completed new "integrated living development" - The Capitol. A major backer for the 10-year project is MTR, Hong Kong's railway developer (also diversified into additional residential/commercial projects). The location is in Eastern Kowloon, at a MTR stop under development called Lohas Park. The Show Flat's location was in TST, not the actual site location - this is probably due to convenience factor, but also due to the fact that the site is in smelling distance of a garbage dump (so I hear).
Note: LOHAS stands for "Lifestyles of Health and Sustainability", and is a global "movement" for healthier, environmentally-friendly living.
The Sell
That said, the Show Flat was only available to view in person for three days, Fri-Sun. After waiting in line for 1.5 hours, you enter a dark room to watch a marketing film to get you further brainwashed. Following this, you proceed through numerous elaborately put together rooms with miniature models of the actual apartment complex and all its amenities (bowling alley, party rooms, swimming pool, MTR station, parks, etc.). At the end of the procession you finally get to see two of the four different apartment show flats (one was 950 sf, one was over 1,100).
Note that the Show Flat's layout and appliances are not representative of the actual apartment you may be buying - they use better brand appliances and have taken the liberty to remove certain walls. These rooms were packed with potential buyers *cough, speculators*
This first-phase apartment (5 towers) will be available for move-in in early 2009, coinciding with the MTR station's completion. Note that you will be listening for construction noise through 2015, as they build out the 21,500 apartments in 50 towers in the next 8-12 phases!
See here for marketing materials
The Close
The best part (said facetiously) of the visit is the large room you visit after you exit the rooms. The room is completely filled with little tables and little chairs which are occupied by agents and potential buyers. I sat down with the agent I came with, and was promptly approached by two of her seniors, one who had obviously been given the role of the "Closer". Little did I know this was the intent of the entire day.
The Closer pitched me the "no risk" investment move of putting down HKD50,000 for the "right" to bid on apartments, once the list was to come out the following week. If you didn't put this money in, apparently you couldn't have first dibs on those apartments. The way it was explained to me, once you saw the apartment prices and decided you didn't want to act, the $50K would be refunded asap. Further, the $50K wasn't even a real charge on your credit card, it was supposed to be just a "hold". (I later found out that I did get charged, and didn't get refunded until 3.5 weeks later).
Prices:
Although I didn't buy in, I did learn about the purchase process - once you decide you want to buy, you only have to put down 5% to "own" the apartment. Following this, you make 3 additional 5% payments before you actually have to get a mortgage. During this few months' time period, you are free to sell/flip the apartment and pocket the proceeds.
They ended up selling almost all of the 2,096 units in phase 1, with the outstanding 20 going to auction. My agent recently told me that her clients' of this building have been offered a 10% premium but have turned it down, suggesting more potential upside.
In early March, I experienced my first taste of Hong Kong's real estate fervor, no matter if it's just the tail end of the boom. I went to visit the "Show Flat" (the sample apartment) for Cheung Kong's yet-to-be-completed new "integrated living development" - The Capitol. A major backer for the 10-year project is MTR, Hong Kong's railway developer (also diversified into additional residential/commercial projects). The location is in Eastern Kowloon, at a MTR stop under development called Lohas Park. The Show Flat's location was in TST, not the actual site location - this is probably due to convenience factor, but also due to the fact that the site is in smelling distance of a garbage dump (so I hear).
Note: LOHAS stands for "Lifestyles of Health and Sustainability", and is a global "movement" for healthier, environmentally-friendly living.
The Sell
That said, the Show Flat was only available to view in person for three days, Fri-Sun. After waiting in line for 1.5 hours, you enter a dark room to watch a marketing film to get you further brainwashed. Following this, you proceed through numerous elaborately put together rooms with miniature models of the actual apartment complex and all its amenities (bowling alley, party rooms, swimming pool, MTR station, parks, etc.). At the end of the procession you finally get to see two of the four different apartment show flats (one was 950 sf, one was over 1,100).
Note that the Show Flat's layout and appliances are not representative of the actual apartment you may be buying - they use better brand appliances and have taken the liberty to remove certain walls. These rooms were packed with potential buyers *cough, speculators*
This first-phase apartment (5 towers) will be available for move-in in early 2009, coinciding with the MTR station's completion. Note that you will be listening for construction noise through 2015, as they build out the 21,500 apartments in 50 towers in the next 8-12 phases!
See here for marketing materials
The Close
The best part (said facetiously) of the visit is the large room you visit after you exit the rooms. The room is completely filled with little tables and little chairs which are occupied by agents and potential buyers. I sat down with the agent I came with, and was promptly approached by two of her seniors, one who had obviously been given the role of the "Closer". Little did I know this was the intent of the entire day.
The Closer pitched me the "no risk" investment move of putting down HKD50,000 for the "right" to bid on apartments, once the list was to come out the following week. If you didn't put this money in, apparently you couldn't have first dibs on those apartments. The way it was explained to me, once you saw the apartment prices and decided you didn't want to act, the $50K would be refunded asap. Further, the $50K wasn't even a real charge on your credit card, it was supposed to be just a "hold". (I later found out that I did get charged, and didn't get refunded until 3.5 weeks later).
Prices:
Although I didn't buy in, I did learn about the purchase process - once you decide you want to buy, you only have to put down 5% to "own" the apartment. Following this, you make 3 additional 5% payments before you actually have to get a mortgage. During this few months' time period, you are free to sell/flip the apartment and pocket the proceeds.
They ended up selling almost all of the 2,096 units in phase 1, with the outstanding 20 going to auction. My agent recently told me that her clients' of this building have been offered a 10% premium but have turned it down, suggesting more potential upside.
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