TORONTO: As protests continue to rock Hong Kong, real estate brokers in Canada and the UK are fielding a flood of inquiries from investors in the former British colony who are eager to get out.
Dan Scarrow, president of Macdonald Real Estate Group in Vancouver, said many of his Chinese agents saw an uptick in interest for both sales and rentals this month from Hong Kong. One of his agents is putting off her planned retirement this year to capitalize on the opportunity.
Before, it was usually a ratio of five mainland Chinese to one Hong Kong buyer coming to open-houses, he said. “It has completely flipped now,” said Scarrow. “Whether or not that actually translates into deals, that comes down to what continues to happen in Hong Kong.”
People have begun scouting for properties in cities including Toronto, Vancouver and London as the unease surrounding Hong Kong’s political future grows amid China’s increasing influence. A drop in residential property prices is making some of these cities attractive.
“Hong Kong money could become a major source of capital,” said David Ho, a broker at CBRE Ltd who deals with Asian investments.
“People are shocked, given Hong Kong was always branded as a stable, rule-of-law financial hub, and now want to move their capital to other cities to mitigate the risk and also to look for other homes.”
A look at few of the markets that are of interest to the Hong Kong buyers:
> Toronto BoomHo’s team is working on more than C$400mil (US$306mil) worth of potential deals for the likes of high-net worth individuals and publicly listed companies who want stability and attractive yields from the city’s real estate boom.
Canada’s biggest city is emerging as a popular choice for commercial and residential property investors given the strength of its housing market, which is partly driven by growth in technology and financial services industries. A weaker Canadian dollar may also mean attractive yields on some deals.
“People are looking at the future, especially people who are young professionals in their late 20s or 30s,” Robert Veerman, a CBRE sales representative who works with Ho, said.
“They still have 50 or so years of professional life ahead of them essentially and the question is where’s the market, jobs, growth going to happen?”
Demand for the top 5% most expensive London residential properties has surged from Hong Kong this year, representing about 6% of all prospective purchasers registering in the market, according to Knight Frank.
Investment from Hong Kong is bound to grow in the next 12 months as more clarity around Brexit emerges, the property consultancy firm said.
> Vancouver’s advantageVancouver, where housing prices have been in a slump for the past year, may be the first city to benefit from the upheaval in Hong Kong.
Changes in Vancouver tax laws have pushed property prices lower since 2018, Knight Frank LLP said in a report, adding that investors will also benefit from currency-adjusted discounts of 17% over the last year.
Luxury homes were hit hardest by property tax changes causing the price of mansions to fall in the last few months leading to more incentives for buyers.
With the city being home to a large Asian population, Vancouver is an appealing choice for many Hong Kong buyers.
“The tsunami tide of capital coming overseas in the last 10 years displaced a lot of old Hong Kong money,” CBRE’s Ho said. “Now, Hong Kong capital is looking at the price correction in Vancouver as an opportunity to get back in the market.” — Bloomberg