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These articles below can also be found in the 1 - 15 Jan 2009 issue of Square Foot magazine:

Expert opinion

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Get set to renovate

 
A downturn may not be the easiest time to offload a property but it’s a perfect time to do one up. Alex Frew McMillan reports
 


"With as many as 11,000 workers laid off at the Las Vegas Sands casino in Macau alone, and numerous other construction projects stalled or scrapped, there are plenty of contractors and builders looking for work"

The property slump has left prospective sellers in a tough spot. They can’t offload their property at the price they might have wanted, so they either have to offer a deep discount or just sit and wait. But if sellers are feeling down, one thing they can do is change their perspective - and their surroundings.


“The downturn is an excellent time to renovate, because contractors and designers are less busy and more likely to negotiate on fees,” says Chris Dillon, a Canadian expatriate, who wrote the book, Landed, subtitled ‘The expatriate’s guide to buying and renovating property in Hong Kong.’


The financial crisis may have made it harder to sell property, but it is actually making it easier and cheaper to renovate.


Firstly, skilled labour is easier to find. It was very hard to get good contractors when Hong Kong’s market was hot, and even more difficult to get them to complete a job on time. But with as many as 11,000 workers laid off at the Las Vegas Sands casino in Macau alone, and numerous other construction projects stalled or scrapped, there are plenty of contractors and builders looking for work.

 

Idle hands are the builder’s tools. And the designers and architects who dream up projects are also likely to have more time on their brains.


The greater supply of labour means costs are coming down, believes Dillon, who talks about renovations from personal experience. He runs a public-relations agency in Hong Kong, Dillon Communications, a revamped industrial space that he gutted in a warehouse building in Wong Chuk Hang. Prior to that, he bought and overhauled an office in Central and has also renovated the apartment that he shares with his wife and children in Pokfulam.

 

The family is now beginning a remodelling job on the Pokfulam apartment’s balcony. The slack market meant Dillon was able to negotiate a 15 percent discount off the initial price.


Hong Kong currency has also experienced a sudden rebound. Two years of declines in the US dollar were reclaimed in the space of a couple of months.

 

That makes it less likely that property will sell - there will be fewer foreigners moving money into Hong Kong to take advantage of the exchange rate, and the prices will seem much less attractive than they did at the start of the summer. But then again, it makes it easier to revamp, because any imported goods will be cheaper.


“With the renewed strength of the US dollar, many imported inputs - especially those priced in euros and pounds – are less expensive than they were a few months ago,” Dillon notes.

 

Dillon recently put out an audio version of his book, and he has just generated a checklist translating basic construction and remodelling terms from English into Cantonese, with the Chinese characters and English phonetic spellings, in case of problems for non-Cantonese speakers in communicating with a contractor.


You’ll not be standing in the middle of the street wondering what the Cantonese for “architect,” “kitchen counter” or “smoke detector” is anymore. Knowing the basic Chinese terms will make life a lot easier - and potentially cheaper.

 

“In Hong Kong you pay a premium to have a contractor or builder who speaks English,” Dillon notes. “Knowing basic construction terms won’t let you work effectively with an all-Cantonese crew, but it will help you avoid misunderstandings, particularly if you are waiting for a designer or other English speaker to arrive on the job site.”


Cutting out on miscommunication errors reduces both the time the project will take and the cost. Better communication will also help a designer or builder let you know when something you’ve conjured up in your head won’t work very well in the real world.

 

To develop the team you need, it helps to talk to anyone you know who may have gone through the remodelling process before. Talk to friends, colleagues and acquaintances about their experience with designers, builders and architects, both so you can get a better idea of what to expect and what to avoid.


“The factory that I’m in now looked like one of the inner rings of hell when I bought it,” Dillon recalls. “The corner had a boiler that was black and broken. All the windows were punched out. Turning that from something pretty unpleasant to an interesting place was pretty satisfying, particularly considering I did it with a contractor who didn’t speak English and I did the design myself.”out. Turning that from something pretty unpleasant to an interesting place was pretty satisfying, particularly considering I did it with a contractor who didn’t speak English and I did the design myself.”

 

Dillon now rents part of the space as a photo studio, for model and fashion shoots, and uses the other part for his public relations business and office. He bought during a rising market in 2005 and, given the poor condition the building was in, the price has probably tripled since then.


Word of mouth seems to work best when finding builders, and is particularly important if you are planning on doing any of the work yourself. Dillon may have operated without a designer, but he couldn’t have redone the bombed-out factory without his friends.

 

“There is nothing quite like a personal recommendation or an introduction to smooth the way,” Dillon listingssays. “I am a unilingual expat. I have had help; a couple of pals who have interpreted my requirements. But it is eminently doable.”

 

There’s no fixed guideline on how much a renovation project might cost. That really depends on your demands, tastes and the size of the place you are overhauling. But it is important to develop a reasonable budget and timeline and then stick to it. Many of the cost and time overruns produced in renovating are caused by owners changing their minds rather than problems with builders or designers. It is also easy to lose perspective and get too caught up in minute decisions over which door handle works best reflecting off which light fixture, and which upholstery fabric best brings out the subtle highlights in the floor.


Dillon spent HK$1 million renovating his HK$11 million apartment in Pokfulam, but just under HK$300,000 on the HK$1.9 million space he now uses as his office. The HK$1 million office he bought in Central cost less than HK$200,000 to redo back in 2002.

 

But all of that was money worth spending. Not only are you likely to recoup remodelling expenses when you sell, but you also get a huge amount of satisfaction in creating a space that is yours and yours alone.


“I rented for about 10 years before I bought anything; dealing with other people’s ideas of interior design,” Dillon says. “Escaping that is truly a delight.”

 

 

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