Is It Time to Invest in Overseas Real Estate?

America Mortgages (www.americamortgages.com) is Asia’s only overseas mortgage company with Direct Bank Programs for Foreign Nationals and Overseas Expat to purchase or refinance residential property in the U.S.

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 on, one thing cannot be disputed – Hong Kong is not the 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 Hong Kong citizens moved to South East Asia, South Africa, and even as far away as South Africa. 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 did not offer 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 was up to 1 million during this period, 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 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 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 its 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 globally, and the market has increased consistently for 30 years with a few pullbacks – Asian Currency Crisis 1997, SARS 2003, G.F.C. 2008, to name a few. Meanwhile, the H.K.D. is pegged to the USD, so being able to cash out your Hong Kong property to purchase homes in the U.S. is starting to make a lot of sense. It’s already happening.

YearNumber of P.R.’s Issued to H.K. Citizens
2016 1,360
2017 1,360
2018 1,525

Other Destinations

Canada issued permanent residency for Hong Kong Citizens:

  • – 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 the peak in July 2017

Case Study: U.S.A.

The reasons why the U.S. attracts the most Foreign Purchases of Investment Property:

– Education – “Something for Everyone”
Most universities in the world. The U.S. has approximately 5,300 colleges and universities in the world vs. 2,600 globally.
That is a staggering 20% of all colleges and universities in the world!

– Evidence Supported
Top Foreign Buyers in the U.S. in 2019: China $13.4bn
Top Destination (more below): Florida (20%); California (12%); Texas (10%), Arizona (5%), New Jersey (4%)

Rental Yield

The U.S. has some of the highest investment yields globally.

Here is just a small sample in (no particular order):

LocationRental YieldHome Value Increase
Arlington, Texas7.5%10.3%
Columbus, Ohio7.9%9.2%
Las Vegas, Nevada5.3%15.9%
San Antonio, Texas6.4%8%
Orlando, Florida5.7%10.7%

** Did you know Orlando is the most searched city in America for Chinese real estate investors?

Since June 15, 2019, America Mortgages has seen a steady increase in loan inquiries from Hong Kong, with about 70% of them in the process of an actual home purchase!

Location Enquiries Loan Processing
U.S. 12 10
U.K.8 5
Canada8 7
Australia 6 3
Japan 6 4

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.” America Mortgages Partners

America Mortgages has bank loan programs that are easy to qualify for. We can 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.

For more information, please contact hello@americamortgages.com.

Schedule a call with our U.S. Mortgage Specialist.