IS IT TIME TO INVEST IN OVERSEAS REAL ESTATE?
Global Mortgage Group (www.gmg.asia) is Asia’s only overseas mortgage company with Direct Bank Bank Programs for Foreign Nationals and Overseas Expat to purchase or refinance residential property in the U.S., U.K., Australia, Canada, Europe, Singapore, Thailand and Japan.
I am a Hong Kong citizen and what’s happening now is heart-breaking to watch unfold. Hong Kong’s cultural identity, fortitude and integrity are all being tested and regardless of whose side you are one, one thing cannot be disputed – Hong Kong is not that same as it once was.
Previous Migration Trends…
Hong Kong is no stranger to phases of migration. Starting in 1967 and lasting almost 10 years, social instability was wide-spread with riots all over the small island city. Many citizens of Hong Kong moved to South East Asia, South Africa and even as far away as South Africa.
Then towards the end of 1984 when the “Handover” to China from the U.K. was officially signed, it was the beginning of the largest outbound migration Hong Kong has ever seen. At the time, the U.K. government was not offering passports to those born in Hong Kong as it once did.
Then just a few years after in 1989, the Tiananmen Square event happened and Hong Kong citizens migrated en-masse, primarily to Commonwealth countries such as Canada, Australia and New Zealand and to a lesser extent, the U.S.
The numbers were staggering!
Some estimate total emigration during this time period was up to 1 million, with the peak between 1988 – 1994 at 330,000.
That is about 20% of the entire population of Hong Kong in the 90s!
Other research shows that an estimated US$4.2billion of outbound investment flowed to Canada during this time period.
Why is this time different?
What is different this time around is that, back then the “Handover” was relatively uneventful and most Hong Kong-born emigrants returned to home, a phenomenon known as "香港回流潮" or Hong Kong Returning Tidal Flow.
Fast-forward 20 years to today and the landscape is very different. Every conversation with friends, colleagues and family, Every news channel, Every newspaper – it all revolves around the protests. Hong Kong is emotional, it’s tense and it’s energy is visceral. We now have a small glimpse into what the future may be like and it's different from the landscape during the Handover.
Folks are looking to move!
Hong Kong has the most expensive property prices in the world and the market has increased consistently for 30 years with a few pullbacks - Asian Currency Crisis 1997, SARS 2003, GFC 2008 to name a few. Meanwhile, the HKD is pegged to the USD so being able to cash out your Hong Kong property to purchase homes in countries like the U.S., Australia, Canada and the UK is starting to make a lot of sense.
It's already happening...
Canada issued permanent residency for Hong Kong Citizens
These major destination cities have also seen declining home prices, making the time to purchase even more appealing.
San Francisco: home prices fall first time in 7 years
Manhattan: Slowest 1Q sales since 2008
Vancouver: down 9.6% from its peak in June 2018
London: down 20% from its peak in 2014
Sydney : down 15% from peak in July 2017
The reason U.S. attracts the most Foreign Purchases of Investment Property.
1. Education – “Something for Everyone”
Most universities in the world. The U.S. has approximately 5,300 college and universities in the world vs 26,000 globally.
That is a staggering 20% of all colleges and universities in the world!!
2. Evidence Supported
Top Foreign Buyers in the US in 2019 : China $13.4bn
Top Destination (more below) : Florida (20%); California (12%); Texas (10%), Arizona (5%), New Jersey (4%)
3. Rental Yield
The U.S. has some of the highest investment yields globally.
Here is a just a small sample in (no particular order):
Arlington, Texas - Rental Yield 7.5% - Home Value increase 10.3%
Columbus, Ohio - Rental Yield 7.9% - Home Value increase 9.2%
Las Vegas, Nevada - Rental Yield 5.3% - Home Value increase 15.9%
San Antonio, Texas - Rental Yield 6.4% - Home Value increase 8%
Orlando, Florida - Rental Yield 5.7% - Home Value increase 10.7%
** Did you know Orlando is the most searched city in America for Chinese real estate investors?
Since June 15, 2019, GMG has seen a steady increase in loan enquiries from Hong Kong, with about 70% of them in the process of an actual home purchase!
U.S.: 12 enquiries - 10 loans processing - 2 loans closed
U.K.: 8 enquiries - 5 loans processing
Canada: 8 enquiries - 7 loans processing
Australia: 6 enquiries - 3 loans processing
Japan: 6 enquiries - 4 loans processing
Hong Kong is an amazing city and it has provided so much, for so many, for so long.
However, Hong Kong, just like any other country, is not immune to domestic turmoil and you have to wonder if this current Migration Wave is different from the others?
There is nothing wrong with being prudent and diversifying your investments aboard.
GMG has bank loan programs that are easy to qualify. We are able to close loans in 30 days with many loan programs not requiring any income proof or the need to leave Hong Kong. Overseas Expats and Foreign Nationals to Purchase or Refinance.
Contact us today for a free quote: email@example.com
Global Mortgage Group
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