Let's consider an average Hong Kong family with a median monthly income of HK$15000 (the official one for 2005, which I found in Wikipedia). It plans to use 40% of the income to pay for an apartment, and a mortgage of 20 years is made. If the interest rate is 5%, what is the amount of the loan ?
My BA-II financial calculator tells me that it is HK$900,000.
If the mortgage equals 70% of the price, the apartment is sold at HK$1.3M.
It follows that if the unit price of the flat is HK$4000, the area is 320 square feet - for a family of four.
And we have not considered the followings:
- the possibility of a fifth person living together (for example, a Filipino maid or a grandparent, who help taking care of the kids)
- a building area (建築面積) of 320 square feet may actually be 220 square feet in saleable area (實用面積)
- how to make up the down-payment
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