The £1.4m penthouse in London

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It doesn't matter which country you're from, I'm sure you'll agree that a 185 square meter, 4 bedroom £1.4m property (roughly USD1.88m) isn't cheap. When my friend told me last year, he was going to buy this, I told him he was absolutely bonkers!!! For that price he could have gotten a massive detached house with a front and back garden in pretty much anywhere in UK. This weekend, I finally had a chance to visit him and see for myself what at £1.4m property looks like.

Crazy right?!!!!
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My friend wasn't born with a silver spoon, and credit to him he worked hard in the past few decades to earn his money. His affordability to buy this in London is also helped by the fact he is from Hong Kong. This is a city which has the most expensive property prices according to https://www.globalpropertyguide.com. The property prices have been booming for well over a decade in Hong Kong, and anyone who has sold a property there will have made a lot lot more than they ever could compare to a 9 to 5 job. Affordability is so high in Hong Kong now, that many can't afford to get on the property ladder, or they scrap all their life savings to buy a shoe box, then continue to work their butt off every day to pay the mortgage.

In the table below, Hong Kong property cost USD28.5k per square meter, that's even higher than London and New York. London and New York are major cities in a big country, and when that gets too expensive, people have the option to move further out from the city. This option is not so feasible in Hong Kong because Hong Kong is so small, it's less than 1% the size of New York, and it only takes an hour or so to get from one end of the city to another. Property may be cheaper at some places, but not much and it's still going to cost you an arm and a leg.
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Source https://www.globalpropertyguide.com/most-expensive-cities

If my friend was to buy a similar quality property in Hong Kong at the same price, there is no way he'd be able to get the same square footage. And that's why he sees this as a good value property and didn't think twice about buying it. It's all down to perspective and your background. Personally, I wouldn't buy this property even if I could afford it, just like I wouldn't spend 5000 Hive to buy a Hive Punk!!! Everyone has their own values, priority and preference in life, and if you earned it and can afford it, I'd say why not go for it. Your life your money.

I would have loved to show you the interior as well, but I have to respect my friend's privacy. What I can show you is the night view from his balcony. 180 degrees with full view of the neighbourhood fireworks during the new year. Isn't it just spectacular?
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What's the property prices like in your city? Is it quite affordable or very difficult to get on the property ladder as well?

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60 comments
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Wow this is really awesome for your friend to get. I really need to work hard too lol

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I live close to a small town in Sweden called Älmhult . Considering the population is only around 18 000 people it should be cheap. But due to the fact that IKEA have their head office here it has driven the prices way up. If you work in IKEA you would afford it, but for others it’s really expensive to buy a house here, that’s why I bought one outside of town for now.

The prices of course can’t be compared to those of London or Hongkong, as you said you’ve made a fortune just owning property there.
I have been to Hongkong and it’s insane how expensive housing is there. I stayed in a nice hotel but the hotel room was still really small. Each square meter is insanely expensive and most people could only afford a very small apartment there.

For me I would much rather choose a house then an apartment, so for me it’s also weird that your friend spent so much on a flat. On the other hand it just comes down to preferences and what you like I guess and what you can afford.

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I take it Ikea is the major employer in town? It sounds like they treat their employees well, which is good because their products are very affordable, so I can't imagine their margins being that very high.

The property market in Hong Kong is and always has been very crazy and fluctuated a lot, and I'm sure it will collapse one day when China falls.

In terms of living conditions, I'm with you, I'd much prefer a house, preferably with a little garden rather than being stuck in a flat all the time. I think my friend finds it easier to settle down in a flat because he's used to it.....

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(Edited)

Yea IKEA is definitely the major employer in town. The population doubles during working hours as people commute to Älmhult. It’s kind of scary in a way when a town is too reliant on one company or one industry.

If IKEA were to say that they are
Moving their head office tomorrow the housing prices would fall real fast.

It been a blessing to live in a house during the pandemic, having the garden as a free zone and plenty of space inside where you can hide from the wife when needed so you don’t drive eachother nuts.

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OOOOHHHHHH so true! London it is a great place to live! But it is SOOOOOOOOO EXPENSIVE!

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tell me about it!!! But people still like the vibe and buzz of it, takes a lot to pull most people away

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(Edited)

I don't know where in London this apartment is but its much cheaper than the equivalent in central Tel Aviv.

The penthouses in my building are exactly this size (185sqm) internally and they are selling for over 15M NIS which is 3.6M UK Pounds.

And these figures are 12 months old. The property prices and the NIS exchange rate have been rising so fast that I think Tel Aviv is now more expensive than London.

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Wow, that is so crazy!!!! Tel Aviv was 4th in the table, but sounds like it's moving up the rank.

My friends place isn't even in central London, it's about 16km outside but still considered London. If it was in central London, it will probably cost more than double that!!

Just out of interest, what's driving up the property prices in Tel Aviv? In Hong Kong it's land scarcity plus the China market. London and NYK I guess it because those are the two major financial cities, and many flock here. I know there are many tech companies in Tel Aviv now, but is that sufficient to push up the property market to such an insane level?

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It’s high population growth (only advanced economy with growing workforce), scarcity and hundreds of thousands of new millionaires from High Tech exits (employees option plans).

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That's insane. Housing prices have gone nuts in the world. Toronto and Vancover Canada are similar. Condos are over a million for sure. No Idea what a detached home in the city would be. And the prices have expanded outward to the point where any home is getting too expensive for people to afford.

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I think Canada was next on the list in the table. Are you worried about it if and when you have to return?

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Luckily we don't live in toronto and we bought our house probably about 7 years ago now, long before the craziness started. We still have the house and are renting it out right now.

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That's great, I know crypto has a lot of potentially (and bearing in mind we're holding this conversation on the block chain,😉), but property is still a bit practically in terms of putting a roof over your head non the long run

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Sounds cheap especially for a penthouse and all depends where in London I suppose. Personally I prefer countryside over city views but as an investment this could actually be a smart move. Property in South Africa is fairly easy to get onto the ladder but then again price is relevant to the area you buy into. I looked back at my old UK property a few months ago and the prices have risen constantly with it now being valued at over half a million. I do understand the concern in the UK for first time home owners as it is not easy.

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This is in south east London, not central, which is what makes it crazy. Property developers are gradually developing further and further out now, and previously not so desirable areas have all become hit now, with the prices to match. Not sure about investment opportunities for my friend's place, as most locals don't buy such an expensive flat, so future demand is really from foreign investors.

Sounds like first time buyers have a bigger opportunity to get on the property ladder in South Africa, so at least that is good

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For South East London that is crazy and way over what I would have ever expected. Locals will skip that and you are right it will be more foreigners but they would rather be in central London if that was the case. South Africa is far easier but then again everything is relative to what you earn.

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(Edited)

I work in, and live near, a small town in the northwestern US. Property prices have ballooned as Californians immigrate and drive up demand on top of the inflation hit we've suffered over the past 14 years or so of "quantitative easing" and "stimulus" and now COVID checks.

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Seems like no place is immune. You'd think living in a small town away from the craze, you can avoid it. Hopefully you've got your own place and won't be impacted adversely with the rise in property prices.

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Ha. No. My path to financial independence got screwed over in the collapse of 2007/2008. That, and health concerns, mean I am struggling. I may have to resort to RV nomad life. No mortgage, no rent, less insurance, less utility costs, and the opportunity to work from wherever I want to be. I just need to find a suitable vehicle to convert.

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Oh dear, sorry to hear about that. Hopefully Hive can help a little bit with your nomad life

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i don't understand these prices. This is definitely a bubble that is going to burst.

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Property and land is scarce so I guess it will always go up, it's just a matter of to what extent it can rise till it falls so flat because no one can afford it anymore

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The view of your friend's apartment is amazing. Although, I think that if I had that money to buy a property I wouldn't choose to buy that apartment either.

The properties in my city with the political and economic crisis that Venezuela has been experiencing for a long time are very cheap compared to the international market, as so many people have left the country, the real estate offer is huge. But very few people even with low prices can afford to buy a property.

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I have to give it for the view, but apparently even that may not last as he said they might be building in front his him in a few years time!!!!

I have heard about the situation in Venezuela from many people here, and that's really unfortunate. If investors have confident in the future, perhaps it's a good time for them to pick up cheap property, but from what I gather, the government doesn't seem to instill confidence at all?

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There is no trust at all, legal certainty is non-existent, so it's a very high risk to invest here. And at this moment, there isn't even hope that the situation will change in the short or medium term, at least I don't have it.

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Hold in there, it can't get any worse can it? So things can only improve in the future

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NZ is having housing crisis. Pricing is going through the roof at the moment. I am looking at an option to get a 2-bedroom apartment. The price varies from 750,000 to 900,000 NZD. This is not affordable for first-home buyers as we don't earn much here. Most of my friends said they have to pay for their mortgage for around 30 years.

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Wow!! That is expensive for a 2 bed, considering NZ has vast land!!! 30 years is a long time, assuming you only manage to save enough for your deposit when you're 30 years old, another 30 years to pay off the mortgage, then that's your whole life pretty much gone. Does the NZ government have any schemes to help first time buyers?

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Yes exactly, spending most of our lives to work and pay off mortgage. The government does provide funding through a scheme called KiwiSaver which is also a worked-based retirement saving fund. Basically, it works like if I choose to contribute 3% of my salary towards this fund, my employer has to make a contribution of at least 3%. Also at the end of the year, the government will contribute to a maximum of $521.43 NZD. After 3 years, I can withdraw up to $10,000 from the fund to put towards purchasing my first home. It's not enough really comparing to the significant increase of housing price.

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That 10k really doesn't sound a lot compared to the property prices. Hopefully you can find somewhere affordable soon

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I am surprised to find London in the second position. I thought there would be more cities. Don't envy those living in London, renting or buying, now that I've seen the statistics. Although I do like the cultural life in the capital.

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Maybe that's why the younger generation like London, because in terms of lifestyle it really has a lot more to offer compared to any other city in UK. But I think most tend to move away or at least out when they have a family, particular now working from home is much more acceptable

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Yeah, you are right. My colleagues with families at the London office travel from outside the capital, but the younger bunch seem to be renting rooms.

I don't mind coming to London for entertainment, rent a hotel. Cheaper than living there. And following the pandemic, I think I quite like the quiet lifestyle these days 😁. And driving in Birmingham is a delight!

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(Edited)

First of all, I love the spectacular night view from the balcony!! Cool.

If I could afford it, I would maybe buy it too. With "afford it", I don't mean spend until the last cent of my savings, (if I would have this amount) as later, one has to maintain the apartment and the life in general.
But, back to reality, I don't have this amount of money, that's for sure. In Spain, in the town I live in, the square meter is between 2,5 and 3K euros for apartments. Houses and villas, a bit more.
For the Spanish salaries it is not so cheap either.

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I forgot to mention, the management fee for that property is £700 a month!!! That's like the cost of a maybe a shared room in central London

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Are you kidding?!?!?! How would he agree to such a deal? That's crazy!

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Comon! When you pay that much for a property, £700 a month is a drop in the ocean😉

On the bright side, the rate is only about £200+ a month, that's pretty cheap!!

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A friend of mine who is living in Hongkong once told me as a lawyer, she struggled to save money because of the high cost of living there. She would like to see the real estate bubble gets burst and she could enjoy some rent discount..

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(Edited)

Yes that's very true, I've also heard of lawyers living in box room size rentals in Hong Kong.

Btw, welcome to Hive, another addition to Team VN!!

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thank you Miss for your warm welcome

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Personally, I'll get a piece of freehold land to grow a forest then build my own sanctuary in preparation for when the city gets too suffocating.

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Good plan 👍

You're in Malaysia right? I heard property is still very affordable there, even in KL it's still cheap compared to many other Asian countries.

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Yeah. It is still relatively inexpensive in Malaysia. Due to the chaotic protest in Hong Kong, a friend bought one property in the capital city three years ago valued at one million that's around 178,000 pounds. Some South Korean friends are thinking about retiring here too. My mom's place received a Taiwanese neighbor five years ago. Hopefully, the political deadlock can be resolved soon.

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Property prices are a strange thing.

We live in North London - previously in zone 2 in a 1 bedroom flat. Then we had a child so moved out to zone 3/4 boundary to be able to afford a decent sized 3 bedroom house with a small garden - and a lot of people in our area have a similar story.

Just for fun we once looked at a mansion in the midlands with 5 bedrooms, giant garden and an actual tower with a meditation room in it. It was significantly cheaper than the 3 bedroom terraced house we bought in London!

But at the end of the day being in London is more important to us than a tower... and it turns out the area we live has a great community and we love it!

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Same for my niece, they have a 3 bed terrace in zone 4 in south London and are starting to outgrow it as her two boys are 6 and 8, but they like the community feel so much. It's all about balancing everything bin life isn't it?

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Absolutely! Everyone has a different priority. It's just weird how different things are (and prices are) even a mile away sometimes.

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For what he has bought there in Thailand you can get that penthouse and even in a bigger size like 200 square meter with beach front views and city views for a average of 550 to 600 thousand pounds and this would be on Jomtien Beach.

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Sounds like a heaven, penthouse by the beach. No wonder so many expats base themselves out in Thailand

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It really is @livinguktaiwan and their are so many beach front bargains going on right now would love to own one myself :)

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Reading these comments, I can see the property prices have been skyrocketing everywhere. In the Czech Republic too, especially in Prague where now even the smallest (one bedroom) apartments start somewhere at 150,000 USD. A decent apartment for a family of four costs at least twice as much. Still nowhere near to the prices in London but with way lower salaries so the level of (un)affordability might be similar...

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That true, because at the end of the day, it's about how much you earn vs the property prices. Sounds like salaries even in Prague is pretty low. I love the city, btw!

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You simply would never get me to live that high up off the ground, house with garden thanks.

Thank goodness each is different, being London one realizes the higher you are the less noise you will get from the street below and yes stunning views.

Wishing your friend many years of happiness high up he deserves it, now enjoy it.

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(Edited)

I used to live in Hong Kong so was used to high rise flats, as did my friend, hence his preference with this property. But like you, I'd much prefer a house with a garden, not too big as I can't manage it, but enough space to try to grow some things, and sit outside during summer, would be my ideal home when I settle down again in a few years time.

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We lived in some never above seven floor as I never enjoyed them, living UK there are so many beautiful places with small homes with gardens outside of cities. Oh then the islands are plentiful for quiet lifestyle I could enjoy.

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