EHK Chats with Property Entrepreneur Victoria Allan
Building blocks for successful real estate investment
Even before Tung Fat Building in Kennedy Town was completed, there was already buzz surrounding the project. The original 1960s waterfront Tong Lau (a tenement building built before the 1960s), was being transformed into eight New York style loft apartments, each occupying one floor.
It was an endeavor that required patience, precisely ten years of it. From finding new places for the tenants to move into and waiting for permits to pass, the arduous process wasn’t what many property developers would sit through.
But patience and a bit of personal sacrifice is what Australian native Victoria Allan, founder of boutique property brokerage Habitat Property, has been honing for years. She was flat sharing until she was 35, for purposes of cutting costs.
“I don’t want to reveal my age though!” she jokes. “At the time, I was trying to save up money to buy that building in Kennedy Town. I wouldn’t have been able to rent by myself and save enough for that property,” she says from her airy Central office.
Restraint coupled with a recognition for potential seems to be her M.O. After arriving in Hong Kong to work at Colliers Jardine, Allan craved a different kind of environment. Four years later, in 2001, she started her own business, Habitat Property.
Now Victoria is still sharing a flat — but with her husband and two children — and she has seen her efforts with the Tung Fat building pay off. All eight lofts were leased two months of launch, with rentals ranging from HK$48k – $110k per month. Her next big project is also a Kennedy Town redevelopment.
We chat with the housing guru about her 18 years of experience in the industry, insights on Hong Kong’s housing market and tips for other entrepreneurs.
How did you initially become interested in real estate?
My parents worked in property, and they had some friends who were property developers. Their friends told me that if you get into property and become a valuer, it’s a great grounding experience to get into other areas.
So I got my valuation degree and I started traveling. I worked in Perth, Vancouver, Chicago New York and Sydney before ending up in Hong Kong.
How did you first set up your company?
I started my business in my bedroom in my terrace. I always wanted to keep my overhead low. Then I was able to get a tiny office on Wellington Street, the size of a room. Eventually I was able to hire an assistant. Then we moved two more times, expanded, and the company now has about 25 total in staff.
Visa wise, I found that the government was great to work with. At the time, the criteria was simple for getting an Investment Visa. You had to have an office space and employ at least two local employees. I was able to do that and grow slowly. It’s easy in Hong Kong to start small and expand. It’s less bureaucratic and quite straight forward.
At what point did you feel secure with the way your business was running?
Not until about 5-6 years ago. Though I’ve been running my business now for 14 years, it took 8 years to feel secure! (On the plus side) once you have your own business, you get further ingrained and rooted into where you are.
Have you seen any housing trends in Hong Kong?
Right now, Western District is really hot. People would rather live in Sai Ying Pun and Kennedy Town than Mid-Levels. It’s convenient given the proximity to Central, and there’s a built-in neighborhood. West Kowloon Cultural District is also undergoing major redevelopment.
How have the changing regulations regarding property ownership affected business?
Many expats can’t buy properties anymore. Before, 50 to 60% of our clients who wanted to buy were expats who did not hold permanent residency. Because of the changing rules, we had to find clients elsewhere.
Typically Chinese are buying in the high end market, starting from HK$50 million.
What advice would you give about purchasing property?
Buying property is a good way to force yourself to save. It’s always better to pay mortgage off than rent.
The first property you buy might not be one that you live in. The whole thing about buying property is that it forces you to put some money aside. If I didn’t buy property, I’d probably just spend that money on vacations and clothes! It instills a level of discipline.
Obviously if you’re only in Hong Kong for short term, like four years, it doesn’t make sense to buy. But if you foresee yourself here long term, then it’s a way to move up the ladder. People need to understand that if you want to buy, you need to make a sacrifice on how you’re living. Keep your housing costs low when you’re younger, which is easier before you have children.
I always go with my gut instinct. When I bought my property in Stanley, I showed it about 40 times. I loved it. I told everyone the reasons why they should buy it, and no one would. So then finally, I thought, let’s just buy it ourselves. And once it was renovated, people saw the value.
What advice would you give to people who want to set foot in this industry?
Understand it’s a lot of work. But once you get it up and running, it gives you a lot of independence and control over your life. Also, always keep your overhead down. Be careful managing your money.
I wouldn’t advise people to flip properties in 12-18 months. It’s a lot of money. It also creates a dangerous property market, and Hong Kong’s housing market has just leveled itself out the last three years.
This interview was conducted and condensed by Hannah Leung of EntrepreneurHK (EHK).