Hong Kong protests fuel buyer interest in luxury Australia, New Zealand homes

FILE PHOTO: An aerial view of houses located in Sydney’s eastern suburbs, Australia, June 5, 2014. REUTERS/David Gray/File Photo

THE following interest from Hong Kong HNW may well explain why the Australian Real Estate Sector are talking of ‘a rebound’ in the property market …

Juwai.com, China’s largest international property website, has recorded a 50% increase in Hong Kong enquiries for Australian properties in the past quarter

*increase in interest in its millionaires-only visa program from wealthy Hong Kong residents who are eyeing a safety net

*another factor: economic impact the protests are having on the Asian financial hub

WORLD NEWS

AUGUST 27, 2019

Hong Kong protests fuel buyer interest in luxury Australia, New Zealand homes

Mell ChunJonathan Barrett

4 MIN READ

SYDNEY (Reuters) – Hong Kong buying enquiries for expensive Australian and New Zealand homes have ramped up due to anti-government protests in the Chinese-ruled city, according to property agents and real estate data, as wealthy investors look for a safe haven.

Jamie Mi, partner at Melbourne-based Kay & Burton, said the real estate agency was receiving about one-third more enquiries from Hong Kong buyers than usual, with most buyers targeting high-end properties priced above A$5 million ($3.4 million).

She said the protests in Hong Kong had “accelerated the motivation” in the past month for wealthy buyers to look for residential properties to move their money into.

The protests, triggered earlier this year by a proposed extradition bill that would allow individuals to be sent to mainland China to face trial in courts controlled by the Communist Party, have become more violent in recent weeks.

Police for the first time used a water cannon to combat protests on Sunday, while some protesters threw petrol bombs at police.

Juwai.com, China’s largest international property website, recorded a 50% increase in Hong Kong enquiries for Australian properties in the past quarter.

“In the current environment, Australia appears as a safe harbor — both comfortably close and far from home,” Juwai.com executive chairman Georg Chmiel said in a statement to Reuters.

Buying real estate in Australia and New Zealand does not grant Hong Kong investors residency.

CAAN: INCORRECT! Numerous Visas apart from the Significant Investor Stream Visa allow the foreign buyer to gain a ‘Permanent Resident’ Visa following the purchase of real estate. We have no doubt that those residing across Asia are already up to date on the holey Australian Visa system …

Several real estate agents said the buying enquiries are likely coming from wealthy foreigners who are already allowed to reside in Australia or New Zealand and who are possibly planning an exit strategy from Hong Kong.

Australia is seeing an increase in interest in its millionaires-only visa program from wealthy Hong Kong residents who are eyeing a safety net amid political turmoil in the Chinese-ruled territory.

Under the program, people can obtain a provisional visa if they invest at least A$5 million ($3.4 million) into complying investments in Australia.

New Zealand has similar investor visas that require a minimum NZ$3 million ($1.9 million) spend.

*Another factor behind the spike in buying enquiries in Australia and New Zealand is the economic impact the protests are having on the Asian financial hub, which is now facing its first recession in a decade.

James Chan, from Bayleys Real Estate in New Zealand, said enquiries had been ticking up ever since the protests intensified. “They are starting to think about how to protect their money – they need to look for a safe haven,” he said.

*Official figures suggest the overall level of foreign home buying in New Zealand is relatively low – about 3 percent of property transfers nationwide – however the data does not capture property bought through trusts.

Australia’s property sector has long been a favored destination for foreign buyers, especially Chinese, although demand has been tempered in recent years by rising state taxes on foreign purchases.

CAAN: This is also misleading with such low percentage Australian fees and surcharges meaning little to those of High Net Worth. The fall in Chinese interest was due to China’s Capital Controls!

Australia and New Zealand have also introduced tighter regulations on foreign purchases of established homes in recent years, pushing Chinese investors toward new apartments.

CAAN: Chinese buyers have also managed to bypass the restriction to buying ‘new homes’; they have bought established homes including Heritage Homes; demolished them for a ‘new home’ and gained a ‘Permanent Resident’ Visa!

*Government data on foreign property investment for 2018-19 has not yet been published.

The year before, Chinese investors were by far the single biggest group of foreign buyers of Australian real estate, accounting for A$12.7 billion ($8.6 billion) in purchases. Hong Kong investors spent A$2.8 billion ($1.9 billion) that year.

Reporting by Jonathan Barrett and Mell Chun in SYDNEY; Editing by Michael Perry

Our Standards:The Thomson Reuters Trust Principles.

SOURCE: https://www.reuters.com/article/us-hongkong-protests-australia-property/hong-kong-protests-fuel-buyer-interest-in-luxury-australia-new-zealand-homes-idUSKCN1VH05J

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