Should I buy a property in Hong Kong?

Hi guys!
This is Jerry, the author of this blog. Before sharing my views on the topic, I would like you to read the following article from a famous Hong Kong blogger.

股與樓的10年挑戰-止凡


We all know that how expensive the properties in Hong Kong are. It is extremely difficult for a young adult like me to own a property without the financial support from the older generations. I have a friend who is a professional. He bought a subsidised flat from Urban Renewal Authority. His parents made the down payment while he is paying for the instalments. I visited his place. It was quite good even though the size is about 200-300 square feet. So here come the question: Is it really worth it?

The answer is NO, at least for me. There are two reasons.

First, it is not necessary for me to move out of my parents' house and live in my own place at the moment. Unlike the Western society, it is not rare for Hong Kong people to live with their parents even when they enter the workforce.

Second, paying instalment is a negative cash flow which eats up passive income. My friend told me he has to pay about 50% of his salary for the flat. Therefore, he does not have much left for investing in other assets such as stocks. If he does not invest in other stuff, how can he create a passive income?

Some might say my friend need not invest in other stuff because the property price will rise and he could enjoy the growth. When the price rises to a certain level, my friend could get a second mortgage and buy another flat. Then he rents out his first flat so that the rent generated could pay the instalments of the second flat. Ultimately he will have more assets than me if I do not purchase any property.

Well, what if the property price did not rise? It might be unfair the assume the property price will drop. Yet, if the property price soars, will my friend be 'brave' enough to buy another at that time? or could his salary allows him to do so?

My ultimate goal is financial freedom. By definition, financial freedom is achieved when your passive income (no matter it is rent or stock dividends or anything else) covers your expenses. So far I could not see how buying a property could help me achieve this goal.

To sum up, I should not buy a property in Hong Kong at the moment. Thank you for reading! Please leave me a comment if you agree or disagree with me.