Non-permanent residents look outside Hong Kong for real estate opportunities

Chris Chan, a Singaporean who works for a property fund manager in Hong Kong, is looking for attractive real estate in the city.

But like many expatriates he currently finds it impossible to buy, and given the raft of restrictions placed on property purchases, and the high prices, he has instead invested a little over US$1 million in US property over the last year or so.

He's not alone. Although prices have dipped in Hong Kong, and developers are offering discounts on new projects, it's not enough to stem the exodus of capital.

Brokers and real-estate fund managers say many of their clients, particularly those hit by the 15 per cent tax on buyers who are not permanent residents in Hong Kong, have turned their attention overseas, and remain focused on the US and London in particular.

"There is a sense that the pendulum is swinging back to the US in terms of opportunity - you get better yield and value for money," Chan said. "Hong Kong has just priced itself out. With the capital controls, my view is that it hasn't gone down enough to warrant comparable investment in the US."

Chan, who is a portfolio manager at The Creations Group, first invested with three other buyers in a Miami penthouse. They flipped that for roughly a 5 per cent profit, net of fees, within a year to redirect the cash into an Atlanta office building that they anticipate will yield around 20 per cent per year.