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Buying apartment

Anonymous Coward (329 posts) • +2

Anything you buy in China that is "nice" is going to look like a garbage dump in 10 years anyway, which is why I suggest buying based on location. Buy something nice to own, not necessarily something nice to live in. You can always use the rental income to live elsewhere.

Also regarding the policy of halting building demolition, it most likely only applies to the downtown area. I only heard this a few weeks ago, but like anything else in China the rules are constantly subject to change.

goldie122 (645 posts) • 0

AC... Buy something nice to own, not necessarily something nice to live in...

Not sure what that even means but if I were buying a place, I'd want something that was nice to live in and so do renters if that is important to you.

However the construction here does suck.

I once lived in a 20000/month villa (only because I wasn't paying for it).

It had been completely gutted and redone before moving in.

Then still, problem after problem mostly water issues under the floor but also just shotty paint work and problems with electric.

I guess it depends on the contractors too.

I do hate paying rent though, like throwing money out the door.

At least if you owned, your monthly payment would count for something.

Anonymous Coward (329 posts) • 0

If you can't figure out that the value of a property is in the land/location and not the building itself, then I would tend to agree that you'd be better off renting. Nice to own = profitable. Nice to live in = comfortable.

Furthermore, disagree that renters are unwilling to shell out $$$ to live in a crappy apartment in an urban area. Take NYC for example, or most other developed major cities not in America.

Haali (1178 posts) • 0

Rent is just like any other service or good, you need a place to live, so unless it is given to you free, you must pay for it. Like food, or water, or clothes. Sure, if you have the money to buy outright then why not, but most normal people with normal salaries and no trust funds or other large windfalls have to borrow money at considerable interest in order to purchase. So in fact, you don't own it, the bank does, until you have paid them back plus interest, by which time you'll probably be middle aged or almost retired. As a renter, when you decide you don't want to live there any more, you just move out whenever you like, rather than waiting for someone to buy the place so that you have the money to buy the next place. I can't see how I will ever be able to afford to buy a property, unless I have a successful business venture or inherit a substantial amount of money. And so what? I've moved house/apartment every year for the last 11 years. I intend to keep doing that (maybe not every year but every 2 or 3 years) until I find the perfect place that I can't bear to leave. If I never find that place, that's fine by me.

GoK Moderator (5096 posts) • 0

I am not sure of the position on capital gains from property sales at the moment. But it did apply under a set of previous market 'cooling' mechanisms. I don't know if it is still in effect.

Anonymous Coward (329 posts) • 0

There was a substantial sales tax in effect a few years ago if you owned a unit for less than 5-years at the time of sale. I am pretty sure it has either been de-fanged or eliminated.

As a foreigner, if you plan to be in China for 10+ years, paying off a mortgage should be a relatively easy task (assuming you can actually get the bank to give you one) compared to local people...even if you're just an English teacher/professional clown.

GoK Moderator (5096 posts) • +2

If you are a lifer, then getting a mortgage could be considered an investment, but in the current market, not a good one. If you plan to leave the property to your children, then that is an additional argument for buying.

In an earlier post I gave an example of rent vs purchase costs of an apartment with the purchase price being equivalent to 55 years rent (this is not an extreme example BTW). This example made allowance for price increases of rent being the same as interest rates on the mortgage. Assuming people won't be buying for cash.
If you plan to be here for 55 years, or more, then buying starts to make more sense. Assuming you are never going to relocate.

The other thing to consider is if you need/want to return to your home country, for any reason. Selling the property, can be a problem in any market that is stagnant, and who knows what stage the market will be in if this event happens. Transferring your capital outside of China could also be a problem.

On the subject of mortgages, many Chinese families split the ownership/mortgage responsibilities with other family members. However, this means that their names are also on the ownership documents. You would all have to agree to sell, and all agree your share of the capital remaining after a sale. There are risks attached to this. You may fully trust your family, but in the event of a divorce or similar, this could change.

djtutolo (10 posts) • +2

Getting in a little late on the conversation, but I say if you have the cash, I would invest in a rental property in your home country and use the monthly income to pay for rent here.

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