Overseas Property Buying & Selling

Thailand

Thailand is a livable city in term of its weather and moderate temperature. Hua Xin District locates in the narrowest region between Indo-China Peninsula. The climate of the Pacific and the Indian Ocean interchanged in transit with temperature between 21-30 Degrees Celsius, pleasant weather both in winter and summer, Hua Xin District is the most suitable temperature in the country. Throughout the ages, the Kings of Thailand chose to build palaces in Hua Xin for their summer recuperation. Thailand’s environmental impact assessment (EIA) is always very strict and Hua Xin is the only city in Thailand rated with zero pollution, with the best air quality within Asia and with no bad smog all year round. The negative oxygen ion content is the also the best among Southeast Asia.

Thailand is the country in rapid economy development. The government has vigorously built up its infrastructure and improved traffic conditions, this enable the development of the real estate market. From the current increase in properties prices and rental returns in Thailand, we can see that Thai property has entered the “Golden Decade”, and now Thailand has various good investment opportunities not to be missed. According to statistics, the price of Thailand’s one-bedroom apartment is around HK$500,000 and the monthly rent is about HK$3,000-5,000, rental rate of return approx. 6~10%. The overall rental rate of return is between 7.93%-9.41%. The GDP of Thailand is rapidly rising in recent years benefiting from the in-depth implementation of the “One Belt, One Road” and the “Eastern Economic Corridor”. It further strengthens Thailand as the transportation hub in Indo-China Peninsula and attracts more capital and population that prosper the real estate market.

United Kingdom

Impacted by the “Brexit” as well as the introduction of the new stamp duty tax at the end of the year 2015 (i.e. buying property worth £1.5 million up are required to pay12% Stamp duty, for second-hand property is taxed at 15%), the property price in central London has receded since the year 2016. But it does not mean that British property has lost its attraction, instead money flows to northern cities where the UK government has been actively developing in recent years, including Manchester, Birmingham and Liverpool etc.

According to IP Global who released a report “Global Real Estate Outlook” last year, the property prices and rental earnings between the year 2017 to 2021 in Manchester, Birmingham and Liverpool are expected to be increased respectively as 28.8% and 20.5%, 21.7% and 17.6% and 22.8% and 17.6%. In addition, the trans-Railway in the outer London district (Cross-rail) will be completed by the end of this year, and property prices along the route are expected to be increased 16% higher than in the greater London region between the years 2016 to 2020.

Furthermore, the local government announced the cancellation of the initial buying stamp duty for property below the value of £300,000. For local residents who are the initial buyers for properties under the value of £500,000, the stamp duty for the first £300,000 can be exempted from tax. Hence the property is more “value-worth” and will drive demand to make house prices rise.

Finally, the process of investing in overseas properties is complicated and involves different regulations and tax regimes, investors are required to have an in-depth understanding of local legislation and the legal risks involved. The UK property market is more transparent, and the legislation is more stringent, the policies on mortgage, tax and tenancy management are clearer and thus suitable for investors from Hong Kong.

Japan

“Good location” as near stations or well-maintained and managed properties are always golden rules for properties investment. Overseas investors are more familiar with Tokyo, Osaka, Kyoto etc. Shikoku and Kyushu have also become popular destinations for Hong Kong tourist in recent years. However, they may not know well the property markets there. From the users’ point of view, the most important thing is to pick the area you like first, and to know the age of the building, property prices and taxes etc., Hong Kong people buy the Japanese properties their first target area is mostly Tokyo, in fact, there are many places not only in Tokyo but also in Shinjuku, Shibuya and Ginza . Daiba and Ueno are also the other options.

In addition, investors should also be aware the relationship between property market and the economy in Japan. It is more important to grasp the right timing of buying. Japan’s economy has a chance to get out of the bottom, and the most important thing is that Japan’s decision to build a casino will definitely have a stimulating effect on Osaka property prices. Shinzo Abe Government wants the casino business can support tourism and stimulate economic growth after the 2020 Tokyo Olympic Games. At present, the casino is intents to be located in the artificial island “Dream Bay” of the southwest of Osaka, which is about 30 km away from the central city of Osaka. It takes about 20 minutes by driving from “Dream Bay” to Universal Studios Osaka and Seaview Pavilion. It is expected the casinos can be able to stimulate the tourism in Tokyo, Osaka and Kobe and at the same time brings synergy to hotel and property markets.

The buildings in Osaka city (Fukushima, Nishi Ku, Tennoji District, Naniwa Ku, Kita Ku, Chuo Ku) are older. Various real estate developers continue to develop the properties in the Umeda area. Looking around different regions in the Osaka city, it can be found that there are not many government and commercial offices in the Chuo Ku district. Osakajo and Dotonbori are popular on sightseeing.

At present, the Japanese apartment is about 200 Square feet or so, the price is around HK$1 million. For attracting more investors from mainland and Hong Kong, the prices of the properties in good location is rising more and more. Buying a property in Japan should be in long-term basis because of the value added tax. The return on rental income is about 5% to 6%. Many investors will hold the properties in long-term, which are a support factor for Japanese property prices. Of course, rents are often different depending on conditions such as location, grading and quality of management, so it is necessary to choose a property that is well managed or good maintenance by a management agent. In addition, investors need to pay careful attention as they have to pay management fees and repair fees for the Japanese properties, sometimes repair fees are higher than management fees. Also, the property built before the year 1985 are inferior to those built after that year because of the embedded anti-earthquake requirements for later.

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