2010-08-07

Why Macau's house is so expensive?

"Don't bite off more HOME than you can chew. How much house can you comfortably afford? For most people the answer is a house with a purchase price of no more than 3x their annual household income. Rationale: the cost of a home includes much more than the monthly mortgage payment. It's also property tax, insurance, upkeep, etc. Typically these costs run 2%-3% of the price of your home each year. Assuming a 20% down payment, a 30-year fixed rate mortgage, and interests rates in the 5%-6% rate, the 3x your income rule of thumb will translate into total housing costs of roughly 30% of your gross income."

Read the ARTICLE over Internet, and it made me to think......

The medium income for Macau citizens is about MOP9000.

If a couple with a kid's family, two persons work, and the monthly income, assuming MOP25,000. Annual household income is MOP325,000.

Price price should not be no more than 3x of the annual household income, i.e. MOP975,000.

It seems that it is a reasonable price !!

With 20% down payment, so it implies that one should save MOP195,000.

Till now, the calculation still makes sense to me.

However, I don't understand why in the Macau Market, the selling price of a new flat is more than 1 million, and usually some of them to 4 or 5 million.

Macau is not a good place for buying a house????????????????????????

I remember M told me that he realised the price of house in Macau was driving rocket fast in the past few years, however, according to his knowledge, he knew that the construction materials, the labor cost didn't increase proportionally, so, the answer is who got the MONEY?????

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