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Tread carefully when investing in overseas properties

When investing in properties overseas, buyers need to ascertain the credentials of the developer and verify the terms and conditions of sale.

PUBLISHED : Wednesday, 15 March, 2017, 9:54am
UPDATED : Wednesday, 15 March, 2017, 9:54am

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For many, buying properties has always been the best way to preserve wealth. Considering the soaring property prices in Hong Kong and the government's frequent measures to increase the cost of buying a residential property, many Hong Kongers are now turning to invest in properties overseas.

Those keen to invest abroad may have noticed news reports about unfinished properties. Since real estate monitoring bodies in Hong Kong don't have the power to regulate overseas property transactions, we recommend buyers do their own market research before making investments to avoid any deception.

Incomplete developments

Overseas projects promoted in Hong Kong are generally still under development, so unlike completed, second-hand properties that can be visited through estate agents, it's difficult for buyers to monitor work progress at overseas building sites. That's why buyers should research the developer’s background as well as the project’s scope and surrounding environment before they decide to invest.

One way to find out more about the developers is to look at their track record. Information on the projects they’ve managed in the past, the specifications of completed properties and their building standards, as well as any discrepancy between the expected completion, intake and the subsequent delivery of properties can be researched online.

British developers Berkeley Group and Telford Homes Plc, Japan’s Mitsubishi and Australia’s Lend Lease are all leading property developers in their respective countries, and have considerable experience in property development as well as long histories. Buying properties from these well-established developers should be much more reassuring.

Staying vigilant

Before signing the sales agreement for a newly built property, buyers should pay attention to certain clauses, such as whether the project has planning permission and a 'long-stop date'. The investment information lets you know whether the project has already secured government approval. Specified completion dates also offer buyers better guarantees.

Buyers should be vigilant and pay attention to detail to ensure they are making a well-informed and sound investment. The focus should not be solely on the property, its pricing or potential investment returns – many perspectives determine a project’s merits and drawbacks.

In next article, we will elaborate the strategies involved. You are also welcome to email us if you have any questions.

To learn more, please click here or contact JLL International Properties at +852 3759 0909 or email [email protected].