Police urge Hong Kong investors to use caution when buying property overseas
Force claims it received 18 complaints where homes bought in the US were not as advertised
Police have warned Hong Kong residents about the risks of buying property overseas after 18 local investors complained about being cheated out of HK$12 million in total this year when buying homes in the United States.
This compared with 135 complainants last year who said they lost HK$100 million in total in 13 property projects in Taiwan, Japan and the United Kingdom, where some of the construction work ended up being stalled or uncompleted.
The police’s Commercial Crime Bureau admitted that such cases were difficult to pursue as they involved jurisdictions across countries and cross-border actions. None of the Hongkongers involved have had their financial losses recovered and no arrests have been made so far.
Bureau superintendent So Man-kuen said all the reports it received this year involved a local property intermediary that regularly held seminars on sales of overseas projects to lure customers to invest.
“The 18 complainants had invested in seven development projects in the United States through this agency,” So said. “The customers felt like they were being cheated after the housing units were established as the renovations were different from the sales book. We are looking [to see] if any criminal elements were involved.”
She refused to disclose any case details but added the force had sought help from their overseas counterparts.
Last December, more than 50 Hong Kong investors in Manchester’s Angelgate luxury flats marched to police headquarters in Wan Chai, claiming they had put over £30 million (HK$312 million) into a suspected development scam.
Construction was suspended last year after the developer, Pinnacle Alliance, sacked the construction company and requested additional funding to finish the project.
So alerted the public to pay attention when investing in foreign property projects, as local property agencies tried to tempt customers to invest by citing high returns. But some developments were never completed.
“Some developers offered [low priced] off-plan purchases to collect funds from investors to buy land for construction,” he added. “The unclear land ownership and unbuilt property caused high investment risk.”
Chairman of the Investor Education Centre, Kelvin Wong Tin-yau, advised investors not to solely rely on information given by agencies or developers, but to seek opinions from independent third parties.
“Maybe investors should go abroad to see the construction site and the facilities around it. They should also study the developer’s reputation and past projects,” Wong said.
Transport and Housing minister Frank Chan Fan told the Legislative Council last week that the Estate Agents Authority and the Consumer Council received 10 and 13 complaints on average per year on the sale of non-local residential properties between 2014 and last year.
“Vendors of non-local properties can now carry out sales and promotional activities easily through the internet, thereby increasing difficulties in law enforcement,” Chan said to the lawmakers last Wednesday.
“The Estate Agents Authority is during preparing a set of guidelines for issue later this year to remind the property agents and salespersons of the matters they need to comply with and pay attention to in handling the sale of uncompleted properties situated outside Hong Kong.”