HONG KONG – Millennials in Hong Kong are becoming more active in the home buying market, taking up one in three new mortgages this year, according to a new report.

However, agents say it is often their parents who are paying the huge deposits for the flats.

Millennials – who are currently 23 to 37-years-old – accounted for 32 per cent of total new mortgages in the second quarter of the year, up from 19 per cent in 2013, making them the second largest age group after Generation X, that’s those aged 38 to 52, the report from finance house TransUnion has found.

Ivy Wong Mei-fung, managing director of Centaline Mortgage Broker, says the biggest obstacle for millennials getting their foot into the housing market is the down payment, which makes up at least 20 per cent of the home price.  That is why so many parents are now stepping in to help.

Hong Kong is often dubbed the world’s “least affordable” housing market, with flats costing over 18 times annual median income.

“I’m scared that if I don’t buy now and with prices keeping going up, it will become even more difficult for me to afford a home,” said Elaine She, a Xiamen-native who moved to Hong Kong a decade ago.

She bought a resale flat in May with a mortgage of over HK$5 million (US$640,000), with her parents financing a considerable portion of the down payment.

Cheung Po-kin, a 27-year-old Hong Kong native, said he was in the same boat.

“Without the help of family, you I couldn’t even think about buying a home,” he said after taking on a HK$5 million mortgage together with his older brother, after buying a new flat two months ago.

Since first-time buyers have been exempted from the 15 per cent stamp duty imposed in 2016, parents have chosen to buy flats under their children’s names.

Hong Kong’s fresh university graduates receive an average monthly salary of HK$14,685 (US$1,880) in their first job, a survey by jobs portal JobsDB.com found in January.

But their average income dropped 15 per cent between 1995 and 2015, a separate survey by public policy monitoring groups New Century Forum and New Youth Forum showed.

Back home, buying a condo in Singapore has become all the rage with uncertainty in HDB leases.

Source: South China Morning Post