Hong Kong real estate investors continue to be active globally, acquiring properties everywhere from London to Sydney. In fact, the only place they aren’t buying real estate is at home where prices are the most expensive in the world and predicted to climb even higher in 2018, according to Cushman & Wakefield.
“Homes in Hong Kong are too expensive to afford, so people are looking overseas for alternative investments,” Neo Cheung Wing-tat, CEO of Convoy International Property Consulting, told the Nikkei Asian Review. “The ease of finding information online, an increase in banks offering loans for rental or investment properties and measures to curb speculative investment in Hong Kong housing are all contributing to the trend.”
The housing markets in UK, Australia, Japan and Canada have primarily benefited from the soaring domestic prices, but a few developers from Southeast Asia are now capitalising on the demand from Hong Kong buyers for overseas real estate. Some Hong Kongers considering a property purchase in Southeast Asia use it as a second home or retirement property that can be let out when not in use while others purchase units strictly for investment purposes.
Having spent a total of USD 6.6 billion on overseas property during the first half of 2017 alone, Hong Kong real estate investors are a group developers will continue to target. Here are key areas in Southeast Asia that Hong Kong real estate investors are targeting.
Malaysia has become an attractive place among retirees from Hong Kong because of the Malaysia My Second Home (MM2H) programme. Those who purchase a property and can support themselves without seeking employment are able to obtain a 10-year, multiple-entry visa. Family members are also eligible for the visa which has made MM2H desirable for those in Hong Kong wanting a hassle-free retirement haven.
Places like Phuket have been popular with Hong Kong holiday home seekers for decades. However, a growing number of investors are now investigating opportunities in Bangkok. Research from CBRE showed that 85 projects by 35 developers from Thailand were marketed to Hong Kong buyers last year with even more expected in 2018. As long as the price remains competitive, Hong Kong investors prefer property in the THB 3 million (USD 95,300) to THB 10 million range (USD 318,00), demand will be strong.
Solely focusing on the investment benefits, Hong Kong buyers became the top buyers of Ho Chi Minh City property in 2017. With both strong demand and rising home prices, Vietnam could continue to see an influx of investment from Hong Kong buyers as rules regarding foreign ownership of property in the country become clearer.
Could Hong Kong buyers flock to Singapore? Given their preference for political stability and risk aversion, it’s possible Singaporean real estate could be in demand. Home prices continue to recover and the Bank of Singapore (BoS) is already predicting foreign demand for Singapore residential property market to return in 2018.
According to BOS head of strategy Eli Lee, even with a 15 percent stamp duty for foreign buyers still in effect, the Singaporean market may represent value when compared to other markets popular with Hong Kong property investors such as Canada and Australia. Both countries experienced rapid home price growth in the past few years and may be set for a slide similar to what took place in Singapore.