ONEILL Group Hong Kong – Recent and past news articles regarding Foreign Buyers in US, Hong Kong Buyers Look to US Housing Market, Hong Kong Property Investors, US Property Investors, US Real Estate and Asia Buyers. China buyers investing in the United States look to New York, Los Angeles, Las Vegas, Hawaii and Florida.
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Hong Kong Hosts US Properties Conference December 8-18
The annual US Property Conference launches next month in
Hong Kong. The bi-annual conference
provides a platform for investors throughout Asia to better understand the
ownership opportunities available in the US markets and features experts in the
fields of market analysis, taxation, legal, immigration and finance. The event
is coordinated by the ONEILL Group Hong Kong a firm specializing in US
properties for international investors.
The highlight of the conference is the investor seminar
scheduled for the 13th of December.
“The seminar gathers experts to discuss the US markets and the
details of ownership in the US. This
year we have representatives from the Trump Hotel Collection’s New York and
Waikiki properties who will provide detailed analysis on those
sub-markets,” says Consulina Wong Director of Asia for the ONEILL Group
Hong Kong.
International investment in the United States surged to
over US$82 Billion in 2011 according to the National Association of
Realtors. Chinese investors are the second
largest group accounting for almost 10% of all foreign investment in the US
representing a 100% increase compared to 2007.
“Buyers from Asia have accounted for over half of
the US$600 Million in sales at the Trump Tower Waikiki with many of the recent
sales to Chinese,”
says Sean Combs, Asia Pacific Sales Director for the
Trump Waikiki development. “The
combination of luxury lifestyle, hotel services, and the option to have the
property managed and rented while they are away are very appealing to this particular
buyer segment.”
New York City remains one of the top cities for Hong Kong
investors. “Hong Kong and New York
share a long history and very deep ties through the finance and trade
industries,” says Amy Williamson Vice President of Prodigy
at the Trump SOHO.
“Hong Kong investors are among the most savvy and
sophisticated in the world and the Trump SOHO seems to be
a perfect fit with over twenty of the recent sales from our investor groups in
Asia.”
The US Property Conference runs from 8 December through
the 18th. The 13th December seminar is
open to qualified investors but seating is very limited.
“The investor seminar fills up quickly but we have a
series of smaller breakout events before and after to accommodate the overflow
demand and to focus on specific investor needs.
We have been organizing this conference for several years and with the
surging demand, I think this will be the best one,” says Wong.
For more information about the conference, seminars and
private meetings contact the ONEILL Group Hong Kong at usconf@ogrouphk.com or call 3103 1008.
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In 2007 average home prices in the United States slipped from $221,900 to $219,000 which was then shortly followed by a massive 21% drop over the next two years. Chinese real estate, on the other hand, maintained its value through the Great Recession as property values tripled between 2004 and 2009. Fast forward another two years, and major cracks are beginning to surface within the Chinese real estate market as speculation about the collapse of the bubble has started to emerge. (To learn more about housing bubbles, check out Why Housing Market Bubbles Pop.)
TUTORIAL: Exploring Real Estate Investments
Standard & Poor’s recently cut its outlook on Chinese developers from “stable” to “negative” in anticipation of a “sharp correction” for real estate prices. Analysts are forecasting that home prices will fall by 10% within the next year.
Oversupply
The primary concern for the sustainability of current prices is based on the oversupply of residential and commercial real estate in the country. In order to maintain GDP growth, the Chinese government has continued to overinvest in large infrastructure projects focused on real estate development.
At an average wage of $7,400 people are neither able to purchase the basic $100,000 apartments units nor invest into small businesses around the new developments. In cities like Hainan, residential apartment occupancy rates stand at only 30% while more industrialized cities such as Shanghai and Beijing also have substantial vacancy rates of approximately 50% and 35% respectively. Prior to deflation of the American real estate bubble, Michigan had the nation’s highest rental vacancy rate of 18.4%.
Commercial real estate is displaying a similar trend where construction is outpacing demand. What was once expected to be the largest retail mall in the world, the New South China Mall in Dongguan is practically empty as over 95% of its stores remain unleased since its construction in 2005. Although the “Great Mall of China” contains 9.6 million square feet of floor space, less than a dozen active shops remain in the mall. Also, due to the lack of customers the few active shops claim that they can go for days without making a single sale. (For more information on real estate prices, see The Truth About Real Estate Prices.)
Why Build?
Over the last 21 years China has maintained an average quarterly GDP growth of 9.3%, which is becoming increasingly dependent on the real estate market. According to The Atlantic, residential housing investments contributes to 6% of GDP, the same level as U.S. real estate at the peak of the housing bubble. Jonathan Anderson, an economist with UBS, estimates that 2010 property construction accounted for 13% of GDP. Investing in large infrastructure projects which provide no long term economic value has become a notable method of creating growth. By overbuilding to preserve the image of rapid growth, the Chinese government is applying Keynesian economic policies at wasteful rates.
Of note, the overall GDP data coming out of China is highly questionable. The Wall Street Journal states that every province in China reports a higher growth rate than the nation. Building ghost towns is just another way to artificially inflate this uncertain GDP figure.
Current Prices Are Too High
In contrast to the empty ghost towns, property prices in major metropolitan areas have risen to unsustainable levels. At the peak of the American housing bubble, the average new home price to annual disposable income ratio topped out at slightly over five, meaning that it would take five years of savings to fully purchase a home. The current corresponding metric for Shanghai is … 57. Property values in some of China’s major cities have already started to slowly fall. (For more information in identifying a bubble, check out 5 Steps Of A Bubble.)
Original story – China’s Real Estate Bubble
Copyright (c) 2011 Investopedia US. All rights reserved. Investopedia.com is a division of ValueClick, Inc.
Los Angeles
Ultimate City for Investors
Los Angeles is
attracting bargain-hunting Hong Kong and mainland Chinese buyers who are
capitalising on low prices
Peta Tomlinson | South China
Morning Post
June 15, 2011
Historical and business ties run deep between Los Angeles and Hong
Kong. Dating back more than 170 years, they continue today in trade ranging
from electronic and agricultural products to textiles and wine.
It
was the 1850s gold rush that first attracted the Chinese to California, making
them among the first Asian immigrants in the United States. But soon the
lifestyle, educational opportunities and growing Chinatown in Los Angeles
attracted prospectors of a different kind: those seeking to share the American
dream.
In
1850, the US Census showed there were just two Chinese residents in Los
Angeles. Today, their numbers have swollen to the extent that California now
has the largest ethnic Chinese population in the US. In terms of business ties,
Hong Kong is California’s sixth-largest trading partner. Last year, Californian
exports to Hong Kong were worth US$6.8 billion.
The
2008 financial crisis produced a new breed of Chinese in Los Angeles: the
bargain hunter.
When
the Los Angeles Sheraton Universal Hotel was sold to Shenzhen New World Group
earlier this year, the price was undisclosed, but if the widely mooted figure
of US$90 million is correct, this was something of a windfall for the Chinese
buyer (which also bought the Los Angeles Marriott Downtown last year for an
estimated US$60 million). The Los Angeles Times reported that the
seller, a local developer and landlord, paid US$122 million for the hotel at
the top of the market in 2007 and spent US$25 million on improvements, but lost
control of it last year after the recession battered the travel business.
The
report quoted Jim Butler, a Los Angeles hotel lawyer who worked on the Sheraton
deal, as saying that those who invested in hotels from 2005 to 2007 ran out of
money. “Overnight, properties dropped 50 per cent or 60 per cent in value,
and cash flows fell through the bottom,” he said.
Residential
homeowners felt the pinch, too: in September 2008, industry analyst MDA
DataQuick found that 46.9 per cent of all homes sold in California the previous
month were foreclosed properties. That helped send the statewide median home
price plunging 35.3 per cent for the year, the firm said.
The
latest data for the S&P/Case-Shiller Home Price Indices shows the slide may
not be over yet. The US National Home Price Index declined by 4.2 per cent in
the first quarter of this year, after having fallen 3.6 per cent in the last
quarter of 2010. Nationally, this returns home prices to their mid-2002 levels,
and barely above the lows hit during the worst of the recession.
For
Hong Kong and mainland buyers, whose home territories were far less affected by
the global economic and real estate recessions, the US woes are an opportunity.
Patrick
ONeill, a Hong Kong-based US property specialist, says the combination of low
prices, inventory oversupply and low American interest rates creates “the
ultimate investor climate” for overseas buyers. It is even more attractive
when compared with Asian property price hikes.
“The
situation in the US is a sharp contrast to the mainland, Singapore and Hong
Kong, where property prices are at an all-time high,” says ONeill, CEO of
ONeill Group. “Hong Kong [property] increased over 45 per cent while the US
decreased 30 per cent during the same period.”
As
a result, Chinese investment in US property nearly doubled last year compared
with 2009, according to the National Association of Realtors. “We are on
track for that figure to double again in 2011. For the Hong Kong buyers, the US
became the number one country of interest in 2010 for real estate investment,
surpassing the Chinese mainland and Britain for the first time. Los Angeles and
New York continue to be the top US cities of interest,” ONeill says.
Late
last month, ONeill Group held a property seminar in Hong Kong to examine market
conditions and investment opportunities. Los Angeles featured because it offers
price discounts of 35 to 40 per cent below the peak of 2006, and rental vacancy
rates under 5 per cent.
“Comparatively
speaking, this is a stable market with net rental yields hovering around 4 to 5
per cent. These are better net yields than we are currently seeing in Hong
Kong, New York and London,” ONeill says.
Forty
potential investors attended the seminar, and a dozen went to sales meetings
the next day, to learn more about properties such as the W Hollywood
Residences, where prices have been reduced up to 40 per cent and start at
US$500,000.
ONeill
describes these residences, attached to the hip W Hotel, as “the hottest
new development in California”, with a super-chic design and 24/7
pampering by the hotel’s Whatever/Whenever W concierge services.
“These
143 unique residences at the iconic intersection of Hollywood and Vine have
views sweeping the LA skyline,” he says. “Residents enjoy every
amenity including two outdoor pools, jacuzzi, fitness centre, multiple lounges,
restaurant and the hottest nightclub.”
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Beijing the smartest city pick for
investors
SOUTH CHINA MORNING POST by Peggy
Sito
December 22, 2010
Hong Kong. A patchy recovery in house prices around the
world in the third quarter of this year was led by markets in the Asia-Pacific,
which recorded an average rise of 9.9 per cent. The increase was tracked in the
global house price index by property consultancy Knight Frank.
The data shows
that for the first time since 2008, prices in each of the six world regions
monitored by Knight Frank ended the quarter with gains. But in sharp contrast
to the performance of the Asia-Pacific market, which topped the list of
gainers, European prices ended at the bottom of the list with a rise of just
0.8 per cent.
As a troubled
year for property markets comes to a close, we take a look at properties in
seven cities that were popular with Hong Kong investors this year to see which
of them generated the best returns. They are Beijing, Hong Kong, London, New
York, Singapore, Sydney and Vancouver.
Property
consultants agreed that the mainland market was the smartest choice for
investors in luxury properties with budgets of between HK$10 million and HK$20
million. Against a background of austerity measures by the government, risks of
investing in the mainland were high, but so were the rewards – anything up to
40 per cent depending on the location and timing.
Driving price
gains at the top end of the market in Beijing and Shanghai were historically
low interest rates and a flood of liquidity. In a display of confidence that
stunned the market, an investor paid 11.6 million yuan (HK$13.51 million) for a
tiny 400 square metre flat in the Legacy Homes estate in the upmarket Chaoyang
district in Beijing.
But the 29,000
yuan per square metre price tag commanded by flats in the estate at the
beginning of the year has since risen to 40,500 yuan per square metre,
according to London-listed property consultancy DTZ, which means the early-bird
investor is sitting on a paper profit of some 40 per cent after just 12 months.
A standout
exception in an otherwise lacklustre property market in Europe was luxury flats
in Central London, which came close to generating the same high returns
available in Beijing and Shanghai.
In January this
year, consultant London Central Portfolio was engaged by an overseas investor
to find a two-bedroom apartment in a prime area of central London. The client
was looking to buy a property below market rates with the potential to add
value through refurbishment. London Central Portfolio chief executive Naomi
Heaton said the investor settled on a flat in Notting Hill priced at GBP625,000
(HK$7.56 million).
“After
accounting for reorganisation and renovation costs, the flat is now showing a
20 per cent increase in value. That increases to over 33 per cent in Hong Kong
dollar terms when accounting for the currency swing against the sterling,”
she said. Heaton said the owner had not sold the unit and was waiting for
prices to rise even further.
In Hong Kong,
the value of a 1,131 square foot flat in the Sorrento residential development
at Kowloon Station rose 17.44 per cent to HK$14.68 million in the first 10
months of the year.
In Singapore,
prices are up a more modest 10 per cent or so for the year, said agents, and in
Brisbane, Australia, a median apartment price of around A$400,000 (HK$3.08
million) at the beginning of the year has risen to just A$413,000.
Luxury home
prices in Sydney fell over the course of the year, and investors were likely to
have seen the value of properties in this market decline some 7.5 per cent,
according to Knight Frank.
As the year
draws to a close, global house prices continue to rise, albeit at a slower
pace, noted Knight Frank. Average annual price growth around the world was down
to 3.1 per cent in the third quarter from 4.3 per cent in the previous quarter,
it said.
“In the
United States, annual price inflation has fallen back to 0.6 per cent, compared
to 4.2 per cent in the second quarter of 2010; average prices in the US now
stand at their mid-2003 level,” said Liam Bailey, head of the
consultancy’s residential research.
“Whilst
the weakening of growth in the third quarter is partly due to the end of the
government’s tax incentive for first-time buyers, the additional issue of high
supply volumes, much of it hidden due to pending foreclosures, is continuing to
blight the housing market.”
Investors in
New York properties who got their timing right were still sitting on some modest
gains.
“Manhattan
housing prices bottomed out in late 2009 and have since bounced by about five
to 10 per cent,” said Patrick O’Neill, the chief executive of O’Neill
Group, a Hong Kong-based property firm specialising in international real
estate.
“A client
purchased a two-bedroom condominium on the East Side in January for HK$16.38
million and the property is probably now worth about HK$18.02 million.”
In Vancouver,
detached house prices in Richmond grew more than 13 per cent, said Robert Chen
of Vancouver-based property agent Regent Park Fairchild Realty.
What tips do
the experts have for the year ahead?
“I think
New York might be interesting. It is the one major luxury market that saw
prices fall a lot in the crash, but which did not see a rapid rebound in 2009
or early 2010,” said Knight Frank’s Bailey.
While there was
an element of risk in the New York market, Bailey said it had the potential to
outpace London, “which is currently catching its breath”, as well as
the major Asian markets, which were experiencing a slowdown in price growth and
where there was a growing risk of prices falling.
Knight Frank’s
Hong Kong-based research team expects price falls of up to 20 per cent in
Beijing, Shanghai, Guangzhou and Shenzhen in 2011.
“Fears
over the impact of the expanded US quantitative easing programme on asset
prices in Asia has prompted China to step up capital controls to resist foreign
fund flows into its property market. In fact, the imposition of capital
controls in a number of emerging markets in recent months suggests the
potential for the trend towards unfettered capital flows over recent decades
will be reversed,” said Bailey.
US Housing Crash Slows in 6 Cities – What the Botton Looks Like – USA Today
ONEILL Group Hong Kong
By Julie Schmit, USA TODAY
April 7, 2011
The U.S. housing market looks like a scorched landscape.
EnlargeClose
32% from their 2006 peak. Many economists expect them to fall at least 5% more this year. Some predict even steeper declines. Even if home prices bottom later this year — a big “if” for many markets — they’re not likely to rise much for several years, forecasters predict. “It’ll take a long time for markets to recover,” says Paul Dales, economist at Capital Economics.
That’s because millions of homes still face foreclosure. Lending standards are tight. Almost one-quarter of homeowners with mortgages are underwater, which means it will be tough for them to move up into nicer homes because they owe more than their current house is worth. Yet, even charred terrain sprouts green shoots eventually. And some areas have laid the groundwork for better days, according to an analysis for USA TODAY by real estate website Zillow.com. Of the nation’s 100 largest metropolitan areas, Zillow identified six —Las Vegas; Fort Myers, Fla.; Stockton and Vallejo, Calif.; Hartford, Conn.; and Columbus, Ohio— that show best what housing markets look like when they are bottoming out but not yet in recovery mode. To identify them, Zillow considered factors such asthe trajectory of home prices, housing affordability based on a ratio of prices to local incomes, and foreclosure rates.
None of the six is seeing price gains, just lessening declines that are expected to continue. Their foreclosure rates have peaked, so the worst could be behind them. Homes in these markets also are becoming more affordable, relative to local incomes, than they were before the real estate boom and bust of the past decade. Investors in many of the markets say the housing deals won’t get much better. “In these markets, you can kind of see a light at the end of the tunnel, and it’s been a pretty long, dark tunnel,” says Stan Humphries, Zillow.com chief economist.
Las Vegas: Flat: The new up
Investors are betting that the home market here has bottomed — or is about to.
Daniel Callihan, 57, a former mortgage company officer, sees that when he hits foreclosure auctions held in a parking lot near downtown. There are twice as many bidders as a year ago, Callihan says. He’s bought and sold 10 Las Vegas homes in the past two years. Many Las Vegas investors are paying cash. In February, more than half of southern Nevada’s existing homes were bought with cash, local agents say. Investors also are turning many homes into rentals, says Paul Bell, president of the Greater Las Vegas Association of Realtors. No wonder: Homes that sell for $60,000 can fetch $800 a month in rent — an investment return almost three times the rate in Manhattan or Los Angeles, says Patrick ONeill, CEO of ONeill Group, which is buying Las Vegas homes.
Before softening in recent months, Las Vegas home prices had been largely flat for more than a year. “Flat, for us right now, is very good,” Bell says. Whether prices will stay flat is another matter. Moody’s Analytics doesn’t expect Las Vegas single-family-home prices to bottom until mid-2012. One problem: The city still has thousands of homes headed to foreclosure, says University of Las Vegas economist Stephen Brown. He says it will take at least three years for the market to absorb the excess homes. Perhaps the only sure bet in Vegas? That its housing bottom “will be a long one,” Brown says.
Vallejo, Calif.: Bruised but with ‘good bones’
Realtor Ramon Torres has a front-row seat on the housing wreckage in this San Francisco suburb. Seated next to a living room window during one of his recent open houses, he saw just one couple coming up the steps in the first hour. They stayed less than five minutes, apparently underwhelmed by the $269,000 five-bedroom house with streaked windows and chipped paint. The owner, who owes $470,000 on the house, wants a short sale. Sixteen similar homes are for sale within a 1-mile radius, and Torres fears that the “worst is yet to come” for Vallejo as more homes are lost to foreclosure. Last year, one in 16 homes here received a foreclosure filing, the nation’s 10th-highest rate, RealtyTrac says. Torres also fears that Vallejo’s reputation will scare off home buyers, given that the city declared bankruptcy in 2008 and has made deep cuts in city services, including police and fire personnel.
But Vallejo, along with Stockton, Las Vegas and Fort Myers, also was hit early and hard by the national housing bust and will be one of the first to recover, Zillow says. Last year, Vallejo’s foreclosure filings dropped 12%, while they edged up nationwide almost 2%. Today’s Vallejo buyers are mostly investors who can get good rent for some of the lowest-cost housing in the San Francisco Bay Area, real estate agents say. “There’s a very strong investor presence,” says David Tipp,owner of Tipp Realty at Glen Cove.
Jay Boberg, 52, a Los Angeles-based investor, has bought four Vallejo properties in the past two years. He’s rented them all and immediately went cash-flow positive. He sees Vallejo as a city with “good bones,” including a waterfront, views of the San Francisco Bay and proximity to San Francisco. “The fact that you can rent an apartment or a house here, with a view of the (San Francisco) Bay, for $800 to $1,300 a month is incredible,” Boberg says. “I can’t believe real estate here won’t be worth much more in 15 years.”
Columbus, Ohio: Getting in young and cheap
First-time home buyers are having a hard time in today’s market, given tight lending standards and competition from all-cash buyers. In February, 34% of existing-home buyers were first-timers, a National Association of Realtors survey says. In a healthy market, that would be 40%, the NAR says. But Columbus and the five other markets Zillow analyzed for USA TODAY have become so affordable that people who didn’t think they could afford to own are finding that they can. Lisa Lee, a 25-year-old business analyst, recently bought a $60,000 three-bedroom home in a suburb here that had gone through foreclosure. Her monthly mortgage, including insurance and property taxes, will run about $140 less per month than the rent she paid on her two-bedroom apartment. She secured an FHA-backed loan. Her down payment and closing costs came to about $2,900. “I couldn’t believe the house was so cheap,” Lee says. “Why keep wasting money on rent?” Columbus is also getting a little boost from consumers with stable finances who put off buying homes during the recession, says real estate market analyst Robert Vogt of Vogt Santer Insights. Given signs of a national recovery, people are “getting the confidence to move,” Vogt says.
Fort Myers, Fla.: New values ‘wow’ buyers
Ray Bayer, 59, of Pittsburgh has long planned to retire in Florida, but prices were too high. In January, the postal worker finally bought a $255,000 Fort Myers home that he says would have fetched $400,000 at the market’s peak. Bayer and his wife, Kathy, 57, a nurse, expect to retire to it in a few years. Fort Myers, like much of Florida, has been battered by foreclosures. In 2010, one in 12 Fort Myers homes had foreclosure filings, the nation’s second-highest rate after Las Vegas.
Even so, Fort Myers’ foreclosure pace last year was down 28% from 2009. And recently, banks have slowed the pace at which they put homes on the market. That’s driving multiple offers and buyers who have to settle “for their third or fourth choice,” says broker Terri Lodge of Century 21 Sunbelt Realty. In February, the number of single-family homes for sale in Fort Myers was down 52% from the same month in 2009 and sales were up 2.4%, says Bob Groves, managing broker of Coldwell Banker Residential Real Estate. Snowbirds and retirees are fueling much of the activity, Realtors say. “They’ve seen the deals and said, ‘Wow,’ ” says Rob Keller, a Coldwell Banker agent.
Hartford, Conn.: Jobs to help
Adam and Clare Baroncelli have been on the open-house circuit for several months and have seen good homes get snapped up more quickly. The increased activity drove them off the fence. They have made an offer on a $370,000, four-bedroom home in Simsbury, near Hartford. “There’s a lot more activity,” says Clare, 34. The Baroncellis moved in August from Florida to Connecticut because of Adam’s job change. Job growth is expected to help the Hartford region.
Of the four major labor markets in the state, Hartford has the best prospects for job growth, says Steven Lanza, editor of The Connecticut Economy, the University of Connecticut‘s economic publication. Late last year, just 12% of homeowners with mortgages in the Hartford region owed more on their homes than they were worth, Zillow data show. That’s far better than the national average, then 27%. Fewer underwater homeowners means there are more homeowners who can move up into more expensive homes.
Rob Giuffria, president of Prudential Premier Homes in Farmington, Conn., says there are huge differences among Hartford areas in terms of the current housing market. Some upper-scale neighborhoods — fueled by white-collar workers and executives — may be bottoming, while some inner-city areas are worsening, he says. Lanza looks for a broader “recovery” soon. As with the other markets Zillow analyzed, that doesn’t necessarily mean improvement.
“It means you’re not getting worse and maybe you’re getting better,” he says.
Stockton, Calif.: Pain and opportunity
Few areashave been through a longer and darker tunnel than this central California city.
Since peaking in 2006, Stockton’s median home price is down 62%. For three of the past four years, Stockton ranked in the top five nationwide for foreclosures, says market researcher RealtyTrac. In January, six of 10 homes for sale in the city either were bank-owned, in foreclosure or tied to a delinquent mortgage.
Yet there are glimmers of change. Last year, Stockton dropped to No. 7 in foreclosures nationwide. Local Realtors say there are more non-distressed homes for sale now than there were a few years ago. More low-ball offers are being refused. And multiple offers are common on lower-end homes. “It’s a very competitive market,” says Jerry Abbott of Grupe Real Estate in Stockton. He recently got six offers for one home priced at $121,000, a short sale in which the lender agrees to sell a property for less than is owed.
The big concern is when banks will begin to list for sale more of the distressed homes they’ve kept off the market, which could hurt prices. Banks slowed their foreclosure processes last fall after a public outcry over thousands of improperly documented foreclosure cases. The other issue is when Stockton will regain jobs. The unemployment rate in the local county — 17.6% in February — is one of the nation’s highest. Moody’s Analytics predicts Stockton-area home prices won’t return to their 2006 peak for more than 20 years. Still, some people say it’s time to buy, including Cary Fopiano, 41. Since 1996, she and her husband, Steve, 50, have made money on two of the Stockton homes they’ve owned. They lost money on one but are still far ahead. The stay-at-home mom and manufacturing manager bought their fourth home last year, on a lake in an upscale neighborhood. They’re shopping for another to turn into a rental investment. “Prices are about as low as they can go,” Fopiano says.
| American nightmare is an investor’s dream | ||||||
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| American Nightmare is Hong Kong Investor Dream – South China Morning Post
Peta Tomlinson
March 16, 2011Hong Kong buyers find big bargains in the struggling Big Apple.
New York is a city where fortunes are made and lost – and not only on Wall Street. After Lehman Brothers crashed, the number of “short sales” – in which a home sells for less than the amount owned on a mortgage – rose alarmingly.They included town houses, co-ops – owned by co-operative housing corporations – and condominiums. It seems no one was spared. Short sales advertised in one week ranged from a US$250,000 two-bedroom on the Upper East Side, to a US$2 million three-bedroom property designed by Philippe Starck in the financial district.
Despite prices plummeting by 30 per cent, American buyers were thin on the ground, such was the panic about their own circumstances. But from the outside, it was an offshore investor’s dream.
Three factors crippling the United States property market – an oversupply of homes for sale, high unemployment and a weak currency – worked to their advantage, making a very attractive proposition for overseas buyers.
Investors who would normally put funds into the New York Stock Exchange now saw the value in property. Apart from the pure investment numbers adding up, there’s also the desirability factor: who wouldn’t like to slip into a conversation that they owned a condo in Manhattan?
That interest translated to sales. Data from the National Association of Realtors indicates that, between April 2009 and March last year, foreign buyers purchased US$66 billion of US residential property, or 7 per cent of the residential market. Buyers from Hong Kong and the mainland were the fourth biggest buyer group.
That was last year – what’s the story now? According to Patrick O’Neill, CEO of ONeill Group Hong Kong, New York City continues to be one of the top markets for international investors, along with California, Florida and Las Vegas. Of these markets, he says, New York is still the top pick for the group’s Hong Kong investors.
“There is a synergy and similarities between the two cities: both are top financial centres, urbanised, and fast-paced. Everyone is looking for a bargain and it is happening right now in New York. Also, don’t discount the importance of good dim sum in Chinatown.”
The New York market bottomed out in the third quarter of 2009, O’Neill says.
“Since then prices have bounced [back] and now appear to be oscillating slightly, with modest growth forecasted this year. In the fourth quarter of 2010, average prices remained flat compared to the third quarter, but are up 14 per cent compared to the fourth quarter of 2009.
“Overall, prices remain discounted 20 per cent to 25 per cent from the peak in 2006. It is hard to predict how long prices will stay down, but we know for sure that this temporary window of opportunity will end – hey it’s New York City.”
Indeed, last year might have been a record year in property foreclosures and repossessions, according to RealtyTrac, but some agents already see an upward trend.
The latest Manhattan residential market report by brokerage Brown Harris Stevens shows prices for Manhattan apartments edged upward last quarter, for the sixth consecutive quarter, to stand 8 per cent higher than a year ago. It found the average co-op price also rose 8 per cent as more buyers began to favour larger apartments. Marcus & Millichap Real Estate Investment Services says the US apartment market staged an “incredibly strong comeback in 2010″, well ahead of expectations.
It found that all 44 of the markets surveyed were expected to post employment growth, vacancy declines and effective rent gains this year, confirming a sweeping recovery.
New York City claimed top spot in this year’s National Apartment Index, which ranks a series of 12-month, forward-looking variables, including forecasted employment growth, housing affordability and rents.
Post-crisis, though, buyers are savvier. They’ve realised the Big Apple is huge market. Hong Kong-based property company IP Global, which still rates New York as one of its property hot spots for this year, says Jersey City has seen a boom in real estate over the past few years, as Manhattanites cross the river for more competitive prices and lower taxes.
“Many of the residential properties being developed in Jersey City are larger than in Manhattan and are targeting families looking for more space,” notes IP Global’s New York property market report.
IP Global data shows the median property price in New York City in January to be US$1,110,000 – the highest in the US. In Jersey City, next to Manhattan, the median price drops by 22 per cent. This in an area where, the report says, “it is a quicker commute to Wall Street than from Times Square and Central Park”.
Top condos with stunning city views
If money is no object, Patrick O’Neill, of the ONeill Group Hong Kong, recommends Trump SoHo Tower in New York City as a “good buy”. The new, 46-storey, five-star condo hotel in “the fashionable heart of Manhattan” offers sweeping views of the city skyline, Hudson River and Empire State Building. Amenities include a spa, fitness centre, outdoor pool and 24-hour room service and concierge. Prices range from US$1,196,000 to US$2,670,000. More from www.ogrouphk.com.
For investors on a smaller budget, “who would like to gain a foothold in the property market and take advantage of the New York story”, IP Global recommends The Beacon in Jersey City. The Beacon is a 350-unit condominium development – the largest residential historic preservation project in the United States – with views across Jersey City, the Statute of Liberty and the Manhattan skyline. Amenities include a 24-hour concierge, on-site gourmet market and restaurant, car park with valet service, a pool, gym, spa, cinema and a community garden.
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| The perfect US storm for overseas buyers | ||
| Distressed property in the Florida area is a natural target for foreigners, for investment or as a base. | ||
| Peta Tomlinson
Dec 22, 2010
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Hongkongers are well known as savvy shoppers. If anyone knows how to spot a bargain, they do. Perhaps that’s why their interest has been piqued of late in the large volume of distressed property still available in the United States.According to the National Association of Realtors, buyers from Hong Kong and China were the fourth most active international property purchasers in the US this year, following buyers from Canada, Mexico and Britain. The Chinese accounted for 8 per cent, but could soon overtake the British buyers, who are noticeably falling away.
And though offshore buyers have traditionally focused on major cities like New York, much of the year’s activity has taken place in Miami, Florida. Apart from the sun, sand and trendy nightlife, they are drawn by the current mix of market conditions, which Patrick O’Neill, chief executive of Hong Kong-based O’Neill Group, describes as “a perfect storm” for investors.
He explained that the US housing market peaked in 2006 before plummeting an average 30 per cent to the low point in late 2009. While cities like New York and Washington experienced value drops in the 25 per cent range, other states like Florida, Nevada and Arizona saw drops of 60-70 per cent.
“The combination of depressed prices, historically low interest rates and overbuilt supply is the perfect storm for investors. In the Miami market as an example, investors can buy properties for less than the construction costs of building.”
Miami property broker Peter Zalewski, founder of Condo Vultures, agrees, saying he has never seen anything like the current demand coming from offshore. “Eighty per cent of the sales in downtown Miami are foreign-based. This is unprecedented.”
Zalewski, who hunts out “deeply discounted deals” for clients before the product makes it to market, says foreign buyers are leveraging their countries’ strong currencies to accumulate bargain-priced distressed property in South Florida. Their hope is to resell “in the near future” once mortgage financing is restored to the market. “These all-cash, international buyers are focusing primarily on new, high-rise condominium units that are now trading for nearly a 50 per cent discount off of the preconstruction contract prices of the peak in 2005,” Zalewski said.
He said the influence of the foreign nationals is strongest in the greater downtown Miami market – the epicentre of Florida’s condo crash – where 22,250 new units were built between 2003 and this year. In the four previous decades, developers built 11,500 units in the same neighbourhood.
Here, foreign nationals account for up to 90 per cent of the transactions in certain buildings.
Zalewski says increasing economic ties are another reason for the influx from Asia.
“Buyers from Asia are increasingly looking at South Florida, and Miami in particular, as an attractive hub for servicing the Americas.
“Toss in deeply discounted, newly constructed real estate, and it is logical to see why buyers from Asia are increasingly acquiring properties in South Florida.”
Patrick O’Neill, whose agency helps Chinese buyers to invest in international real estate, says their natural instincts are drawing them to the US. “Chinese buyers are extremely savvy investors and have the ability to purchase globally,” he said. “Clearly the major Asia markets are near the peak and the UK, another favourite, has already rebounded. The US has only begun to recover this year, so the bargains are still available.”
In the Miami area, he says, a property that sold for US$1 million in 2006 can be purchased today for US$300,000, which is less than the cost of construction.
“Miami is young city with a diverse population, 55 per cent foreign born, that tops 5.5 million as a region. We have a multilingual workforce; US infrastructure ranging from transportation to utilities, legal system to currency; geographical proximity to Latin America, North America and Europe; and a chic side that is accurately depicted in TV shows, movies, music videos and video games. Locals often joke that the best part of Miami is that it is so close to the United States.”
O’Neill, who has also lived there, agrees.
Meanwhile, the talk around town is becoming more upbeat, Zalewski says.
“The last condo construction crane came down in October 2008, a month after Lehman Brothers failed. Foreclosure filings in South Florida are on pace for less than 60,000 in 2010, following 98,000 in 2009 and 76,000 in 2008. In 2007, lenders filed to foreclose on 33,000 properties.
“With many of the pessimistic pundits starting to finally acknowledge that a bottom is in sight for South Florida’s coastal real estate, conversation is starting to intensify about the need to be buying land for the next wave of development. We do not think a tower will go up in the sky in the foreseeable future, but then again, anything is possible in Miami.”
Living the high life
This is living in Miami: Condos in Four Seasons Residences, part of the Fours Seasons Hotel, are in the tallest building south of New York. Commanding spectacular views of the ocean and Miami skyline, the property comes with every conceivable luxury and affords residents the full complement of Four Seasons hotel services.
A second property recommended by Patrick O’Neill of O’Neill Group is Millennium Tower. Located, like the Four Seasons, in the ”elegant community” along Brickell Avenue, these condos offer luxurious amenities such as on-site bar and lounge, pool, exercise room and views of Key Biscayne.
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Beijing the smartest city pick for investors
SOUTH CHINA MORNING POST by Peggy Sito
December 22, 2010
Hong Kong. A patchy recovery in house prices around the world in the third quarter of this year was led by markets in the Asia-Pacific, which recorded an average rise of 9.9 per cent. The increase was tracked in the global house price index by property consultancy Knight Frank.
The data shows that for the first time since 2008, prices in each of the six world regions monitored by Knight Frank ended the quarter with gains. But in sharp contrast to the performance of the Asia-Pacific market, which topped the list of gainers, European prices ended at the bottom of the list with a rise of just 0.8 per cent.
As a troubled year for property markets comes to a close, we take a look at properties in seven cities that were popular with Hong Kong investors this year to see which of them generated the best returns. They are Beijing, Hong Kong, London, New York, Singapore, Sydney and Vancouver.
Property consultants agreed that the mainland market was the smartest choice for investors in luxury properties with budgets of between HK$10 million and HK$20 million. Against a background of austerity measures by the government, risks of investing in the mainland were high, but so were the rewards – anything up to 40 per cent depending on the location and timing.
Driving price gains at the top end of the market in Beijing and Shanghai were historically low interest rates and a flood of liquidity. In a display of confidence that stunned the market, an investor paid 11.6 million yuan (HK$13.51 million) for a tiny 400 square metre flat in the Legacy Homes estate in the upmarket Chaoyang district in Beijing.
But the 29,000 yuan per square metre price tag commanded by flats in the estate at the beginning of the year has since risen to 40,500 yuan per square metre, according to London-listed property consultancy DTZ, which means the early-bird investor is sitting on a paper profit of some 40 per cent after just 12 months.
A standout exception in an otherwise lacklustre property market in Europe was luxury flats in Central London, which came close to generating the same high returns available in Beijing and Shanghai.
In January this year, consultant London Central Portfolio was engaged by an overseas investor to find a two-bedroom apartment in a prime area of central London. The client was looking to buy a property below market rates with the potential to add value through refurbishment. London Central Portfolio chief executive Naomi Heaton said the investor settled on a flat in Notting Hill priced at GBP625,000 (HK$7.56 million).
“After accounting for reorganisation and renovation costs, the flat is now showing a 20 per cent increase in value. That increases to over 33 per cent in Hong Kong dollar terms when accounting for the currency swing against the sterling,” she said. Heaton said the owner had not sold the unit and was waiting for prices to rise even further.
In Hong Kong, the value of a 1,131 square foot flat in the Sorrento residential development at Kowloon Station rose 17.44 per cent to HK$14.68 million in the first 10 months of the year.
In Singapore, prices are up a more modest 10 per cent or so for the year, said agents, and in Brisbane, Australia, a median apartment price of around A$400,000 (HK$3.08 million) at the beginning of the year has risen to just A$413,000.
Luxury home prices in Sydney fell over the course of the year, and investors were likely to have seen the value of properties in this market decline some 7.5 per cent, according to Knight Frank.
As the year draws to a close, global house prices continue to rise, albeit at a slower pace, noted Knight Frank. Average annual price growth around the world was down to 3.1 per cent in the third quarter from 4.3 per cent in the previous quarter, it said.
“In the United States, annual price inflation has fallen back to 0.6 per cent, compared to 4.2 per cent in the second quarter of 2010; average prices in the US now stand at their mid-2003 level,” said Liam Bailey, head of the consultancy’s residential research.
“Whilst the weakening of growth in the third quarter is partly due to the end of the government’s tax incentive for first-time buyers, the additional issue of high supply volumes, much of it hidden due to pending foreclosures, is continuing to blight the housing market.”
Investors in New York properties who got their timing right were still sitting on some modest gains.
“Manhattan housing prices bottomed out in late 2009 and have since bounced by about five to 10 per cent,” said Patrick O’Neill, the chief executive of O’Neill Group, a Hong Kong-based property firm specialising in international real estate.
“A client purchased a two-bedroom condominium on the East Side in January for HK$16.38 million and the property is probably now worth about HK$18.02 million.”
In Vancouver, detached house prices in Richmond grew more than 13 per cent, said Robert Chen of Vancouver-based property agent Regent Park Fairchild Realty.
What tips do the experts have for the year ahead?
“I think New York might be interesting. It is the one major luxury market that saw prices fall a lot in the crash, but which did not see a rapid rebound in 2009 or early 2010,” said Knight Frank’s Bailey.
While there was an element of risk in the New York market, Bailey said it had the potential to outpace London, “which is currently catching its breath”, as well as the major Asian markets, which were experiencing a slowdown in price growth and where there was a growing risk of prices falling.
Knight Frank’s Hong Kong-based research team expects price falls of up to 20 per cent in Beijing, Shanghai, Guangzhou and Shenzhen in 2011.
“Fears over the impact of the expanded US quantitative easing programme on asset prices in Asia has prompted China to step up capital controls to resist foreign fund flows into its property market. In fact, the imposition of capital controls in a number of emerging markets in recent months suggests the potential for the trend towards unfettered capital flows over recent decades will be reversed,” said Bailey.
Chinese Big Investors to the World
Thursday, 02 September 2010
Mainland and Hong Kong investors have become a major force in the global property market. They have already emerged as the biggest group of buyers in many places, and their share of the market is expected to grow even further.
Jennet Siebrits, head of residential research at CB Richard Ellis said Chinese buyers were poised to overtake Russians as the most active international buyers in teh prime central London housing market. “We would expect the favourable exchange rate to lead to an imminent rise in the number of Chinese buyers investing in prime central London property”.
Mainland and Hong Kong investors have become a major force in the global property market. They have already emerged as the biggest group of buyers in many places, and their share of the market is expected to grow even further.
Favoured investment destinations of Chinese buyers include university towns and cities where their children study, especially in Britain, the United States, Canada and Australia. The combined mainland and Hong Kong student population in Britain has reached 60,000.
Patrick O’Neill, chief executive of the US property developer The O’Neill Group, said the Chinese share of international demand for homes in the US would double to 16 per cent this year. In Vancouver and London, he said, they were already the biggest source of overseas demand.
“Anecdotally, our associates in Vancouver are reporting that Hong Kong and mainland investors comprise over half of the open house traffic,” O’Neill said. Figures from estate agency Knight Frank show that 11 per cent of international property investors in prime central London’s new-homes market are Chinese, who are also the largest overseas group. One-third of buyers of new homes in the Canary Wharf financial district come from the mainland and Hong Kong, the agency reports.
Jennet Siebrits, head of residential research at CB Richard Ellis, said Chinese buyers were poised to overtake Russians as the most active international buyers in the prime central London housing market. “We would expect the favourable exchange rate to lead to an imminent rise in the number of Chinese buyers investing in prime central London property,” Siebrits said.
Chinese investors are most active in the off-plan, or pre-construction, markets across the world from Dubai to Sao Paulo. Other hot destinations include France, where they are buying second-hand apartments in Paris and holiday homes on the French Riviera as well as new homes, reports estate agency HomeHunts.
Homebuying is tracking other economic activities. In Bordeaux, for example, the number of vineyard investors from the mainland and Hong Kong has been growing, according to Joel Palous, proprietor of AIM Vineyards consultancy.
Chinese buyers are said to target homes across the price spectrum. “The price points of mainland and Hong Kong investments begin from the low-end properties starting around HK$800,000,” O’Neill said. At the top end of the market, agents recount helping mainland business people purchase £15 million (HK$180 million) houses in London. O’Neill said Chinese investors were taking advantage of the slump in property prices overseas to buy into these markets for capital gains in future. “In some of the overbuilt markets in Southeast Asia and US cities like Miami and Las Vegas, homes are going at a discount of up to 70 per cent,” O’Neill said.
“Real estate is cyclical, and even the most conservative economists project returning to and eventually surpassing the 2006 prices in the next upswing in about four to six years.”
Gary Zhang, a senior manager in a Beijing-based energy company, has been looking for an apartment below US$1.5 million in Manhattan. Among the main reasons for his interest are an appreciating yuan and a drop in New York property prices.
“Prices in Shanghai, Beijing and Hong Kong all are too high. New York City is a better place to invest,” Zhang said, adding that prices in Manhattan have picked up a bit in the first half but are still lower than their peak levels.
“I may work in New York City in the next couple of years. I will move in if I do go. If not, it can just be an investment,” Zhang said.
Currency fluctuations in some countries has also made property less expensive for Chinese investors. The pound has depreciated 20 per cent against the Hong Kong dollar and 30 per cent against the yuan over the past three years, according to Reuters, while the US dollar has depreciated 10 per cent against the yuan.
The mainland’s rapid economic growth means it now has 343,000 high net worth individuals, or people with more than US$1 million in investable assets, according to wealth management company Scorpio Partnership. Hong Kong has 72,000 high net worth individuals. Many such people buy property in Canada, Britain and the US because they are also attracted to their visa programmes, O’Neill said.
Wealthy foreigners can gain permanent residency in Britain by investing £1 million over five years. In Quebec, Canada, those who have net assets of C$800,000 (HK$5.94 million) and invest C$400,000 can get permanent residency. In the US, the requirement is an investment of US$1 million in a business that employs 10 people.
Matthew Montagu-Pollock, publisher of the website Global Property Guide, said mainland investment in overseas property was on the threshold of a boom.
“What triggers any national buying spree is of course economic growth, large increases in personal wealth and large increases in the value of the currency. The mainland Chinese have experienced the first two,” he said.
“Many of them have good reason to want to keep some property outside the mainland for the time-honoured reason of diversification or risk-avoidance. I would expect the US, Canada, Hong Kong, Singapore, Australia and the UK to continue to top the list. Mainlanders’ interest in overseas property seems likely to just keep growing.”
Ed Lewis, director of London new developments at Savills estate agency, said 10 per cent of his company’s sales went to mainland and Hong Kong buyers. He said he expected this proportion to rise next year when the number of British buyers are likely to decline further.
According to website Smart New Homes, the number of new homes for sale in Britain is at its lowest since November 2006. A lack of mortgage financing has deterred many Britons from buying, the website says.
Ironically, while Hong Kong investors benefit from affordable buying opportunities overseas, they are finding competition from mainland investors increasingly tough at home. A third of Hong Kong’s luxury flats were sold to mainland buyers in the first six months of this year, prompting lawmakers to debate curbs on mainland investment.
Two ideas being discussed are raising the investment level in the Capital Investment Entrant Scheme to HK$10 million from HK$6.5 million, and banning outside investment in small-to-medium-sized flats. If enacted, they could restrict the number of mainlanders using Hong Kong as a springboard into overseas property.
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Cash Rich Asian Investors Look WestDistressed US real estate holds bargains as the market slowly begins to rebound SOUTH CHINA MORNING POSTAlex Frew McMillanNov 24, 2010 Danny Lim is about to embark on his third shopping trip to the United States this year. He will be focusing on distressed real estate around the country, hitting various target cities where he expects prices to rebound.The trip will take him to San Francisco, Los Angeles, New York and Las Vegas. He sees it as an opportunity to buy distressed property in the world’s biggest economy before the property market rebounds.
“The residential market is bottoming and starting to come up, but it’s still at a very early stage,” Lim reasoned. “In the next year or so, I think there’s a good window of opportunity before things start to stabilise there.”
His overseas investment strategy has been reaffirmed, he says, by the latest measures taken by the Hong Kong government to curb speculative property demand.
Lim is one of a rising tide of cash-rich Asia-based investors who are targeting real estate in the West. They are hoping to pick up high-value homes or high-yielding rental properties at knock-down prices in the United States and Western Europe.
“We have all this money being made in Asia, and US values are down,” said Patrick O’Neill, chief executive of property agency and developer O’Neill Group. With talk of bubbles in markets such as Hong Kong, the mainland and Singapore, “some investors want to take their money off the table in Asia, and are thinking where else would I go?”
The answer for Lim and those like him is to go West. Born in Indonesia and raised in Australia, Lim moved to Hong Kong after he met his locally born wife. His company, Creations Group, has raised a US$2.5 million fund, Creations Group USA, in Hong Kong and recently closed it to new investment. It has invested US$2 million of the money to buy 35 homes, with offers out on another seven, and Lim is now looking to raise a second fund.
The US market is attractive to Lim and other Asian investors because home prices there fell 31.8 per cent from their peak in April 2006 to their trough in May 2009, according to the Case-Shiller Home Price Index. Although they have since rallied, they are still almost one-third off their previous highs.
As well as the United States, Asian buyers are very active in central London, where they now account for 49 per cent of the investment purchases made over the past year, according to research put out earlier this year by brokerage Knight Frank. Asian investors spent £761 million (HK$9.44 billion) on property in the British capital in 12 months, with a healthy mix of investors from Hong Kong, the mainland, Singapore, Malaysia and other parts of Asia.
In the United States, buyers from the mainland and Hong Kong are now the fourth-most active international purchasers, according to a report released in June by the National Association of Realtors, behind only buyers from Canada, Mexico and Britain. The 8 per cent share of foreign buyers from China is rising, while the 9 per cent figure for the British is slipping, meaning Chinese buyers may soon be the most influential in the US from outside North America.
Financing is the main deterrent for foreigners looking to buy in the US. Whereas 92 per cent of US buyers get a mortgage on their home, more than half – 55 per cent – of foreign buyers pay cash.
Lim’s cashed-up fund targeted lower-end housing near good neighbourhoods. By setting requirements that the properties be single-family homes in move-in condition and at least 1,000 square feet on sites of at least 5,000 sqft, he hoped he was identifying solid prospects. He also requires they produce rents of US$800 to US$1,200 per month but have a price tag of not more than US$200,000.
The purchase prices of property in places like Detroit and South Florida are so low that the fund can recoup its investment in a few years just through rental income.
With the cheapest properties, “we figure we can get our money back in three to four years, net”, Lim said. “So even if the properties went to zero, it didn’t matter. You’ve still got the homes that are producing that return.”
The properties he has acquired so far are averaging rental returns of 13 per cent, net of all expenses for renovation and management
The company is now looking to raise a second fund that will target more opportunistic plays, buying whole apartment blocks and selling them off piecemeal.
“We’ll try to buy wholesale and then sell retail,” Lim said.
“Even in the really good areas now, you can still get some really good deals,” he said.
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China towns
FINANCIAL TIMES
By Richard Warren
Published: November 12 2010 23:57
A game of Chinese whispers has been doing the rounds this autumn. In September, an economist claimed on television that Chinese investors are snapping up homes in east London. Two days later, an estate agent who misheard the programme declared that one-third of all home buyers in the British capital come from the People’s Republic of China. Another estate agent got into a muddle, saying one-in-three pupils starting school at Eton College this autumn is Chinese. The true figure is less than 3 per cent.
Misunderstandings aside, however, an essential truth remains: well-heeled Chinese property buyers are making their mark on housing markets worldwide. Some 475,000 Chinese have assets of $1m or more, according to the wealth management strategy firm Scorpio Partnership. This means China has the fourth-largest number of high net-worth individuals (HNWIs) in the world. More good news for estate agents is the fact that China’s HNWIs keep one-fifth of their assets in property.
Despite the size of this new property-owning class, it can appear invisible. Beijing limits its citizens to taking $50,000 out of the country each year, but many thousands of Chinese quietly skirt round these capital controls. It is tough to pin down how many buyers there are and how much they spend, because their desire to stay under the radar means they can be secretive. Most money finding its way overseas is channelled through Hong Kong, a semi-autonomous special administrative region (SAR), where Chinese can invest freely.
Not surprisingly, mainland Chinese investors are most evident in Hong Kong itself, where prices for super-luxury homes have nearly doubled in one year. Two-fifths of buyers of homes valued from HK$100m (£8m) upwards are Chinese, estate agency Savills reports. Prices for these properties, which are found in Hong Kong Island’s best areas such as The Peak and Southside, have risen 88 per cent over the past 12 months, says Peter Yuen, deputy managing director of Savills Hong Kong. Prices are rising less fast in the luxury and mass markets where a smaller proportion of buyers are mainlanders, he adds.
Chinese buyers of super-luxury homes include businessmen launching companies on Hong Kong’s stock exchange and HNWIs wanting permanent residency, which mainlanders can get by making a capital investment of HK$6.5m or more. This arrangement has led to some Hong Kong politicians wanting permanent residency rules tightened because, they say, the flood of money from Chinese investors is pricing locals out of the property market. Mainlanders are rushing to buy homes in Hong Kong before rules can be changed.
Yuen expects Chinese demand for super-luxury homes to remain buoyant. “Eighty-seven per cent of companies looking for an IPO listing in Hong Kong are from the People’s Republic,” he says, “so it will be very natural for senior staff to have their own accommodation in Hong Kong.”
In London, meanwhile, estate agencies are recruiting Mandarin-speaking staff. According to international estate agency Knight Frank, 2.3 per cent of international purchasers in London’s best districts were Chinese in the 12 months to June 2010. The agency reveals that Chinese buyers like period homes in Knightsbridge and Belgravia, and new-build schemes around Canary Wharf and Stratford, where they hope to profit from the regeneration inspired by the 2012 Olympics.
Many also buy homes to house their children studying in Britain. According to the Chinese embassy, 100,000 Chinese study at British schools and colleges. Learning English is compulsory in Chinese schools, which makes it relatively easy for students to attend British universities. A growing number attend Britain’s public schools. Eton runs a summer school in English language and culture for Chinese schoolboys.
Multi-million-pound budgets are not uncommon. Martin Bikhit, managing director of London estate agents Kay & Co, is aware of Chinese investors wanting blocks of between 10 and 50 flats in prime residential areas to let or run as serviced apartments. Guy Meacock, associate at buyers’ agent Prime Purchase, is helping a Chinese couple find a house in Knightsbridge. Their budget is £15m. She is a financial director and her husband floated his media company on the New York Stock Exchange this year. The couple are expecting a child whom they want educated in Britain. They won’t be domiciled in Britain, preferring to move between homes around the world.
In New York, Kathryn Higgins of DJK Residential says Chinese businessmen buy properties in the $1.5m to $2.5m range for investment or as second homes. “I spent yesterday with a buyer from China who wants two bedrooms, condos only, midtown location, new buildings, lots of amenities, something that will command a high rent,” she says. “The exception to Midtown is Trump Place on Riverside Boulevard.”
Patrick William O’Neill, chief executive of US developer The O’Neill Properties Group, told the South China Morning Post that many wealthy Chinese buy property in the US, Canada and Britain to get permanent residency. But it is not just Anglophone countries that are attracting investment. Chinese buyers have also appeared in increasing numbers in Paris this year, says Mark Harvey, Knight Frank’s international residential consultant, who is based in the city. Usually they want secondary market apartments for family use in the prime 7th, 8th and 16th arrondissements, priced from €3m to €6m.
Taiwan began opening up its luxury housing market to Chinese investors in 2009. Expectations that mainland buyers will flood the island following trade deals between the two countries in 2010 have encouraged a rash of speculative property investment on the island by Taiwanese.
Aided by the rising Chinese renminbi, investors are also buying property in Japan to let out to their countrymen studying there. (Yields are 8 to 10 per cent, significantly higher than the 2 to 3 per cent available in Shanghai). But what the Chinese crave most in Japan are holiday homes. “Big Chinese cities are as futuristic as anywhere else on earth,” says Liam Bailey, head of residential research at Knight Frank, yet China’s impoverished countryside affords little in the way of retreats for the rich. “Rural backwaters in Japan with excellent transport and civilised local shops and restaurants are a real novelty.”
What does the arrival of the Chinese investor mean for the rest of us? Homeowners in areas targeted by Chinese investors could find the value of their property rise, as the pool of buyers widens. And, if China experiences economic problems, Bailey believes more Chinese may invest in property abroad. “My view is that China is at risk of a bust. There is an argument that any fallout could be positive, with wealthy Chinese targeting offshore locations as their home market struggles.”
A former president of the Royal Institution of Chartered Surveyors, Nick Brooke is now chairman of Hong Kong-based company Professional Property Services, where he advises on cross-border investment in China. He believes that China’s capital controls will not stop its people from becoming the world’s biggest property investors over the next decade: “I think we are going to see a substantial increase in outward flows and this will continue to have an impact on markets and values, particularly in Asia.”
The Chinese-assisted boom in Hong Kong’s super-luxury homes market is likely to be be repeated elsewhere, Brooke says. “I see Singapore and Kuala Lumpur as potential future targets,” he says. “It is all about diversification but within an asset class to which they relate and like. The Chinese are coming.”
Double dips a possibility – but no more than that
SOUTH CHINA MORNING POST
CONCRETE ANALYSIS
Patrick William ONeill
Oct 6, 2010
Concerns over a possible double-dip recession in the United States linger, and while some analysts caution there may also be a double dip for the US housing market, others discount that prospect. A collapse in house prices was the main cause of the recent economic meltdown in the US, with home values dropping more than 30 per cent from their peak in 2005. Given the continuing fragile state of the housing market and the economy at large, a double dip in one could lead to a double dip in the other, argue some analysts.
GDP growth for the US in the second quarter was an anemic 1.6 per cent, following nearly 4 per cent growth in the first quarter. The unemployment rate for the month of August was 9.6 per cent – up from the 9.5 per cent reported in July. Homes sales fell 27 per cent in July to an annual rate of 3.83 million, the lowest level since 1999. New-home starts, an indicator of the overall health of housing, remain at a seasonally adjusted annual rate of approximately 550,000 units, which is one-fourth the peak volume of 2005 and one-third the average rate of the last century. Applying the supply and take-up demand, the US currently has more than one year of unsold housing inventory.
Compounding the bad news is the persisting foreclosure crisis. Nearly one-quarter of all US properties are in a negative equity position, meaning the loan balance is higher than the value of the property. More than 14 per cent of residential loans are either past due or in foreclosure. While the data looks bleak, some economists such as Paul Brewbaker, chief economist for US-based TZ Economics, point out that the fundamentals for the US housing market remain strong.
“Asset-price overshooting occurs in all asset classes including housing. Housing prices have fallen too far relative to long-term equilibrium,” Brewbaker says, adding that the annual rate for new housing starts is too low to continue. “To accommodate population growth alone, the US must add a minimum of 1.5 million housing units annually. The current rate of 550,000 means the market is one million units short per year on the flow side.”
Other economists are discounting the negative impact of the drop in overall sales, pointing to the fact that the number was artificially inflated earlier in the year by the federal tax credit of US$8,000, which expired in April; and federal stimulus spending. They also point to the fact that despite the drop in sales, price levels have continued to improve. Second-quarter data from the S&P/Case-Shiller National Home Price Index show US home prices increased 4.4 per cent compared with the first quarter of the year and are up 3.9 per cent over the levels of last year.
“Looking at macro-level numbers is good for macro-level comparisons, but the US market is not economically homogeneous,” says Consulina Wong, director of Asia for ONEILL Group, a Hong Kong-based real estate firm specializing in US properties. “Markets like New York and Las Vegas are completely different. In the second quarter, sales volume was up 93 per cent in Manhattan compared to last year. In Las Vegas the sales volume has continued to slide and oversupply remains a barrier for recovery.”
Asian property investors, led by Hong Kong and mainland Chinese, have increasingly become a factor in the property recovery, swooping up discounted US properties. Investors are reporting discounts in the prime US cities of 25 per cent and up to 60 per cent in the secondary cities. Some see the current economics as normal for a recovery following the worst recession since the 1930s. US housing prices dropped more than 30 per cent from the peak in 2006 to the trough in the middle of last year. The Dow Jones Industrial Average fell to a low of 6,626 in March last year. Since then, home prices have regained 15 per cent and the Dow Jones is over 10,000.
Brewbaker contends that much of the double-dip debate is spawned by non-economists. “For all the people saying there is going to be a double-dip recession, I can’t find anybody for whom that is their forecast. A risk factor is not a forecast. The fact that there is a risk of a typhoon in the middle of typhoon season does not mean that we are forecasting a typhoon. Saying `double dip’ gets you air time on financial news television.”
It appears that the threat of the double dip in housing or the economy is small, but possible as the US continues to struggle with high unemployment, tight credit markets and high debt ratios. The housing market will likely produce mixed signals through next year, with continued deep-discount opportunities for investors.
Patrick ONeill is the chief executive of ONEILL Group, a Hong Kong-based property firm specializing in international real estate www.ogrouphk.com
Manhattan’s Luxury Real Estate Increases 15.5% – Hong Kong Investors Take Note
Luxury properties in the Big Apple are up again in the third quarter posting an increase of over 15% compared to the same quarter last year.
Market Reports HONG KONG
October 5, 2010
Hong Kong – According to the report released by Prudential Douglas Elliman Real Estate, the luxury apartments in New York City which are priced from US$3,060,000 with an average price of US$5,636,600 increased 15.5% compared to the same quarter in 2009 and up 9% compared to the last quarter. While prices continued to increase, luxury listing inventory in Manhattan continued to shrink down 31.2% from the same period last year and down nearly 15% from the second quarter. The number of luxury sales was up over 19% compared to last year’s third quarter to a total of 266 units.
The overall Manhattan condominium market posted an average price of US$1,719,296 an increase of 8.9% compared to the same period last year and up 2.3% from last quarter. The average price per square foot was up 5.7% from last quarter to US$1,199. The real estate report which is prepared by Miller Samuel Inc attributed some of the price gains to a change in the mix of inventory sold.
The number of condominiums sold was 1,341 up 8.6% compared to last year and down 13.7% compared to last quarter. Listing inventory was down 10.8% compared to last year’s period to 4,058 pushing the absorption rate to 9.1 months below the ten year average of 9.4 months according to the report.
According to Patrick ONeill of the ONEILL Group Hong Kong www.ogrouphk.com a firm that helps Hong Kong and Chinese buyers purchase in the United States “New York City prices have been steadily increasing over the past three quarters. Clearly the bottom-bottom of the market was mid 2009 but very few of our Hong Kong investors had the courage to buy US properties then. The increase in overall confidence of Asian real estate investors can be seen in the increase of the purchase volume,” he says.
Recent reports indicate that Chinese, Hong Kong and Asian real estate investors are increasing the property acquisitions in the United States property markets. “New York, Los Angeles and a few other US cities are the big targets for our Chinese property buyers. They want the best and have the ability to purchase it. With the increasing evidence of price appreciation in the capital cities, buyers that were on the fence are now making a move,” says ONEILL.
The Standard and Poors Case Shiller Home Price Index www.standardandpoors.com which tracks US housing prices has been reflecting increased values in New York City since the third quarter of 2009. The third quarter report is due out this week and will be closely watched by Asian investors.
Foreign Buyers See Big Opportunity in Housing Bust
As housing market struggles to recover, foreign buyers see an irresistible opportunity
By MICHELLE CONLIN AP Real Estate Writer
The Associated Press
October 4, 2010
The Viceroy, a swanky condominium complex in downtown Miami, gives the impression that the United States is in another real estate boom. The sales office is strangely exuberant. Buyers gush about the glam condos — designed by hipster tastemaker Kelly Wearstler — and their hotel-like amenities: poolside libations, daily housekeeping and room service food stirred up by a celebrity chef.
Since January, 262 of the Viceroy’s 372 units have sold. But there’s a twist: Almost 90 percent of the buyers are foreigners. And they all paid cash.
The Viceroy’s story is playing out across Miami. Individual investors from as far as Argentina, Canada, Colombia, France, Israel, Italy, Norway and Venezuela are swarming the city’s sales offices to get in on what they see as one of the greatest real estate fire sales in the history of the United States.
At one time, these people would have invested in the U.S. stock market. Now they see the opportunity of a lifetime in the nation’s debilitated housing market. The idea is to rent out the properties and then sell them once the economy turns around.
The math is seductive: Prices at the Viceroy are roughly 52 percent off the 2007 peak. Units once sold for as much $670 a square foot. Today the average price is $319.
“I have never seen such a high concentration of foreign nationals acquiring real estate,” says Peter Zalewski, who has been in real estate for 15 years and founded Condo Vultures, a consulting and brokerage firm. “Eighty percent of the sales in downtown Miami are foreign-based. This is unprecedented.”
Miami is hardly the only hot spot for buyers from outside the United States. Real estate brokers say they’ve seen a surge in Washington, New York, Las Vegas, Los Angeles and San Francisco. In Seattle, Asians are buying property sight unseen, says Joe Brazen of Brazen Sotheby’s International. In New York, 25 percent of buyers at the Armani-designed 20 Pine building, near the World Trade Center site, are from overseas.
“It’s a positive in a sea of negatives,” says Jonathan Miller, chief executive of Miller Samuel, a real estate consulting firm in New York.
This year in Phoenix, for the first time, there have been more buyers from Canada than from California, according to real estate data outfit Information Market. With the Canadian dollar approaching parity with its U.S. counterpart, the opportunity was simply irresistible to Jim Chuong, a 38-year-old Novartis sales manager from Toronto.
Chuong, whose house in Canada is already paid off, used to invest in U.S. stocks. Now he’s investing in Phoenix condos, paying $50 a square foot for units that would cost $500 a square foot in Toronto.
“It’s ridiculous is what it is,” Chuong says.
For foreigners with cash, the deals can make them money from day one. Chuong buys two-bedroom condos for less than $40,000 in low-crime areas. He only picks up units that already have renters. After paying association fees and taxes, he walks away with $300 a month, pre-tax, on each. The deals are now easy to do, thanks to the cottage industry of companies that has grown up to manage virtually everything for foreign buyers, down to badgering renters for the monthly check.
For the international investor class, the United States’ bloated inventory of homes, high unemployment and weak currency make for an unusually attractive buyer’s market.
“Never before have all these things come together like this,” says Patrick O’Neill, chief executive officer of the Hong Kong-based O’Neill Group, which helps Chinese invest in international real estate. O’Neill says Chinese buying in places like New York is on track to double this year.
“Unless you want to go to Baghdad,” O’Neill says, “the United States is the best you can get.”
The trend is showing up in the statistics. In a National Association of Realtors report released in July, 28 percent of brokers reported they had worked with at least one international client, up from 23 percent a year earlier. Among those, 18 percent had completed at least one sale, compared with 12 percent in the 2009 report.
“I was going invest in the stock market, but I decided to invest in real estate instead,” says Diego Garcia, a Mexico City native on assignment in New York City with Pfizer Inc., where he is a regional finance director. Garcia paid $850,000 for a Manhattan one-bedroom in a gleaming new high-rise that he plans to live in for now. “I’m a conservative guy,” Garcia says, “and this was more conservative.”
That’s not to say there aren’t steep risks. An economic jolt could easily throw the whole plan into disarray. The housing market is far from a recovery. In many places, prices continue to fall. What happens if currency values reverse and a foreign owner needs a quick sale? Or a renter bolts in the middle of the night, leaving an empty unit and no cash flow?
It’s not as if foreign buying can be counted on for a housing market turnaround. Overseas buyers represent a mere 7 percent or so of today’s total. Yet in some cities, such as Miami and Washington, the foreign sales are helping to stabilize the markets.
In past downturns, buying a property in the U.S. was the prestigious purview of the wealthy, but today the market is within reach of the swelling ranks of the global upper-middle class.
Colombians, who often call Miami the most beautiful city in their country, have always been drawn to Florida. The difference now is the upside-down economics. It is cheaper to buy in Miami than in Bogota, and you can fly between the two cities for $59 each way.
“Muchos muchos muchos muchos opportunity,” says Elsa de Blaschke, who owns a construction company with her husband in Barranquilla, Colombia, and is hunting for an investment property to buy in Miami. De Blaschke chose not to invest the capital at home because she says Florida offers a better chance of a bigger return.
“The international buyer pool is better than we have ever seen it before,” says Phillip White, president of Sotheby’s International, based in New York.
To match demand, U.S. brokerages are hiring agents who can speak foreign languages and are pouring more resources into marketing overseas.
In October, agents from 11 Sotheby’s International branches will descend on Hong Kong’s convention center to regale wealthy buyers there with slick visuals on showcase properties. In Toronto, agents from Florida Home Finders play to crowds of 800 every other Sunday at a Holiday Inn banquet hall. Jenny Huertas, Condo Vultures’ international sales director, throws seminars for potential clients across South America.
“Their jaws drop. They can’t believe it,” Huertas says. “They think these deals are too good to be true.”
Australia Real Estate Lease Rates Increase 15%
Tasmania reports vacancy rates under 2% for Hobart residential real estate while rental rates increase over 15%
Hong Kong (January 21, 2010) – Recent data released by the Real Estate Institute of Tasmania indicates that the vacancy rates in the state have fallen to historic lows with rates in the main city of Hobart moving under 2%. As a result, rental revenue rates have continued to rise. “Rental rates in the Hobart area have increased 15% on average over the past twelve months” according to Greg Rips, cofounder of Viva Properties an Australian real estate development firm based in Melbourne. “Many of Australia’s secondary cities are undersupplied for the rental demand. The conditions are good for investment owners but hard on the growing population looking for housing.”
Rental yields in Hobart are among the highest in Australia. While Australia’s primary cities such as Sydney and Melbourne provide average yields in the 3%-5% range, secondary cities such as Hobart are providing investors yields in the 6%-8% range according to Rips. “We confidently guarantee minimum rental yields of 8% on select developments in Hobart. We could never offer that level of guarantee in Melbourne or Sydney due to the high land and development costs” says Rips pictured on the left.
International real estate companies also report the increased interest for cities like Hobart. “For real estate investors looking for cash flow in a safe market environment, Australia is hard to beat” according to Patrick ONeill, CEO of the ONEILL Group an international real estate firm in Hong Kong. “Compared to other first world markets like the US or UK, the rental yields in cities like Hobart are tremendous. Additionally the undersupply of properties bodes well for continued capital appreciation.”
With the increased interest in Australia by international investors, finance companies have developed a series of international lending products. Many programs allow investors to finance in multiple currencies to benefit from lower interest rate environments and favorable currency hedges. “Offshore investors have the ability to finance Australian property not only in Aussie dollars but also in the currency of their earnings. With adequate currency knowledge and continual monitoring Hong Kong investors are able to benefit from interest rates as low as 1.75%”, says Dwight Stuchbery of Specialist Mortgage, a finance group specializing in Australian properties.
The high rental yields and low interest rates can provide savvy investors double digit returns. As an example, ONeill points to a development his firm is currently selling called Riverview Village at Hobart. “For investors that take advantage of the financing, the cash on cash returns are over 10%. Combining rental yields and the potential capital appreciation rates, these are some of the best returns anywhere on the global scene” says ONeill. For additional information contact the ONEILL Group Hong Kong at 852 3103 1008 or visit www.ogrouphk.com
Australian Developer to Sell New Real Estate Development in Hong Kong
(Hong Kong) October 23, 2009. Australian real estate developer Viva Properties announced plans to launch an international marketing campaign in Hong Kong for its latest development called Riverview Village at Hobart. Located in Hobart, the capital city of Tasmania Australia, the development is being purpose built for the undersupplied affordable rental market.
“Australia is experiencing a tremendous undersupply of affordable rentals due to population expansion and limited new development. We are packaging Riverview Village at Hobart as a turnkey rental property for real estate investors with rental yields averaging over 7%” according to Greg Rips the Co-founder and Director of Viva Properties.
Foreigners are often kept out of the Australian real estate market due to tight government regulations and the very limited supply of inventory. According to Michael Ta, Co-founder and Director of Viva Properties “typically foreigners can only purchase new build developments in Australia and often those developments are high-end luxury resort homes. We are one of the few developers that provide foreigners the opportunity to own freehold investment properties.”
Viva Properties is well known as an affordable housing developer and has completed over 150 projects throughout Australia and has been awarded the TAHL government tender for nearly 400 affordable housing units in Tasmania. According to Ta the proven track record of Viva Properties provides an additional benefit to investors “our relationship with the local and state entities facilitates government backed rental guarantees for some of our communities. In the cases where there is no government backed plan, we offer a secure five year rental guarantee program”.
The ONEILL Group has been selected as the international sales and marketing firm for Hobart Residences. According to Mr Rips “we wanted a firm that was established in the international market. The ONEILL Group gives us instant access to markets that we previously could not reach”. According to Patrick ONeill CEO of the ONEILL Group, “Riverview Village at Hobart is a perfect match for the investors in the Asia market. Australian real estate is well known as highly regulated which gives owners a sense of security unlike other countries in the region. In addition, the solid trend line of appreciation bodes well with pure investors”.
Riverview Village at Hobart will be priced in the low AUD$200,000s (HK$1.4 Million) and will be available for purchase in Hong Kong beginning December 1. Interested parties can contact the ONEILL Group in Hong Kong at 852 3103 1008
Chinese Big Investors To The World
Hong Kong and mainland buyers are among the biggest property players in capital cities
| SOUTH CHINA MORNING POST
Peggy Sito and Richard Warren in London
September 1, 2010Mainland and Hong Kong investors have become a major force in the global property market. They have already emerged as the biggest group of buyers in many places, and their share of the market is expected to grow even further.Favoured investment destinations of Chinese buyers include university towns and cities where their children study, especially in Britain, the United States, Canada and Australia. The combined mainland and Hong Kong student population in Britain has reached 60,000.
Patrick O’Neill, chief executive of the US property developer The O’Neill Group, said the Chinese share of international demand for homes in the US would double to 16 per cent this year. In Vancouver and London, he said, they were already the biggest source of overseas demand.
“Anecdotally, our associates in Vancouver are reporting that Hong Kong and mainland investors comprise over half of the open house traffic,” O’Neill said. Figures from estate agency Knight Frank show that 11 per cent of international property investors in prime central London’s new-homes market are Chinese, who are also the largest overseas group. One-third of buyers of new homes in the Canary Wharf financial district come from the mainland and Hong Kong, the agency reports.
Jennet Siebrits, head of residential research at CB Richard Ellis, said Chinese buyers were poised to overtake Russians as the most active international buyers in the prime central London housing market. “We would expect the favourable exchange rate to lead to an imminent rise in the number of Chinese buyers investing in prime central London property,” Siebrits said.
Chinese investors are most active in the off-plan, or pre-construction, markets across the world from Dubai to Sao Paulo. Other hot destinations include France, where they are buying second-hand apartments in Paris and holiday homes on the French Riviera as well as new homes, reports estate agency HomeHunts.
Homebuying is tracking other economic activities. In Bordeaux, for example, the number of vineyard investors from the mainland and Hong Kong has been growing, according to Joel Palous, proprietor of AIM Vineyards consultancy.
Chinese buyers are said to target homes across the price spectrum. “The price points of mainland and Hong Kong investments begin from the low-end properties starting around HK$800,000,” O’Neill said. At the top end of the market, agents recount helping mainland business people purchase £15 million (HK$180 million) houses in London. O’Neill said Chinese investors were taking advantage of the slump in property prices overseas to buy into these markets for capital gains in future. “In some of the overbuilt markets in Southeast Asia and US cities like Miami and Las Vegas, homes are going at a discount of up to 70 per cent,” O’Neill said.
“Real estate is cyclical, and even the most conservative economists project returning to and eventually surpassing the 2006 prices in the next upswing in about four to six years.”
Gary Zhang, a senior manager in a Beijing-based energy company, has been looking for an apartment below US$1.5 million in Manhattan. Among the main reasons for his interest are an appreciating yuan and a drop in New York property prices.
“Prices in Shanghai, Beijing and Hong Kong all are too high. New York City is a better place to invest,” Zhang said, adding that prices in Manhattan have picked up a bit in the first half but are still lower than their peak levels.
“I may work in New York City in the next couple of years. I will move in if I do go. If not, it can just be an investment,” Zhang said.
Currency fluctuations in some countries has also made property less expensive for Chinese investors. The pound has depreciated 20 per cent against the Hong Kong dollar and 30 per cent against the yuan over the past three years, according to Reuters, while the US dollar has depreciated 10 per cent against the yuan.
The mainland’s rapid economic growth means it now has 343,000 high net worth individuals, or people with more than US$1 million in investable assets, according to wealth management company Scorpio Partnership. Hong Kong has 72,000 high net worth individuals. Many such people buy property in Canada, Britain and the US because they are also attracted to their visa programmes, O’Neill said.
Wealthy foreigners can gain permanent residency in Britain by investing £1 million over five years. In Quebec, Canada, those who have net assets of C$800,000 (HK$5.94 million) and invest C$400,000 can get permanent residency. In the US, the requirement is an investment of US$1 million in a business that employs 10 people.
Matthew Montagu-Pollock, publisher of the website Global Property Guide, said mainland investment in overseas property was on the threshold of a boom.
“What triggers any national buying spree is of course economic growth, large increases in personal wealth and large increases in the value of the currency. The mainland Chinese have experienced the first two,” he said.
“Many of them have good reason to want to keep some property outside the mainland for the time-honoured reason of diversification or risk-avoidance. I would expect the US, Canada, Hong Kong, Singapore, Australia and the UK to continue to top the list. Mainlanders’ interest in overseas property seems likely to just keep growing.”
Ed Lewis, director of London new developments at Savills estate agency, said 10 per cent of his company’s sales went to mainland and Hong Kong buyers. He said he expected this proportion to rise next year when the number of British buyers are likely to decline further.
According to website Smart New Homes, the number of new homes for sale in Britain is at its lowest since November 2006. A lack of mortgage financing has deterred many Britons from buying, the website says.
Ironically, while Hong Kong investors benefit from affordable buying opportunities overseas, they are finding competition from mainland investors increasingly tough at home. A third of Hong Kong’s luxury flats were sold to mainland buyers in the first six months of this year, prompting lawmakers to debate curbs on mainland investment.
Two ideas being discussed are raising the investment level in the Capital Investment Entrant Scheme to HK$10 million from HK$6.5 million, and banning outside investment in small-to-medium-sized flats. If enacted, they could restrict the number of mainlanders using Hong Kong as a springboard into overseas property.
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South China Morning Post
International sales enquiries. ONEILL Group Hong Kong and Patrick ONeill can be reached at 852 3103 1008
Hong Kong Investors see rich pickings in US bargains
South China Morning Post
June 23, 2010
Concrete Analysis by Patrick William ONeill – ONEILL Group Hong Kong
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| CONCRETE ANALYSIS
Patrick William ONeill
Jun 23, 2010
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In a recent interview in the United States, property magnate Donald Trump is quoted as saying: “This is the best time I’ve ever seen to buy real estate”. It appears that Hong Kong investors agree.In a Barclays Wealth survey, Hong Kong investors overwhelmingly selected the US as the top destination of interest for this year, with Britain and the mainland tied for second place.
The surge in interest is fuelled by a combination of low prices and historically low interest rates. Average US home prices fell by more than 30 per cent since they peaked in 2006, with experts agreeing that the market hit bottom in mid-2009. In some hard-hit cities, including Las Vegas, Phoenix, and Miami, prices fell by more than 50 per cent.
Since then prices have stabilized and modest gains were reported in major markets in the first quarter of this year.
Most property transactions in the US involve separate agents representing the buyer and seller.
The good news for buyers is that sellers typically pay all commissions, including that to the buyer’s agent. Commonly, the seller pays a total commission of between 5 per cent and 6 per cent, which is shared equally between the two agents.
When representing a buyer, real estate agents have a strict legal responsibility to protect the best interests of the buyer. The agent will help in all areas including research, finance, legal, valuations, negotiations and contracts.
Most agents will require an exclusive agreement and some charge small, refundable retainers for their services. The US markets provide diverse buying opportunities. Some markets provide better capital appreciation opportunities while others offer better rental yields.
Markets that have lost more than 50 per cent include Los Angeles, Las Vegas, Phoenix and Miami. Other markets such as New York, Washington DC and Boston experienced smaller price corrections but have the advantage of low rental vacancies and strong cash flows. The US markets are among the most transparent in the world, allowing buyers to research and understand values with confidence.
The comparable market analysis provided by buyer agents will outline the comparable properties that are for sale and those that have recently sold. This is the same information used by appraisers and surveyors to establish values for lending institutions.
Investors can also access public websites to obtain information on property values, demographics and rental income. The most popular sites include zillow.com, ziply.com and realtor.com.
The US encourages property ownership, with numerous tax advantages for property owners that are available to both US citizens and foreign purchasers. With properly planned ownership and tax structure, taxes will be minimized, and in some cases completely deferred.
The US federal long-term capital gains tax rate for real estate is 15 per cent, which is applied to the net profit on property sold after one year. This rate applies to properties in all states.
In some states, such as New York and California, additional state capital gains taxes apply. Other states have no state capital gains tax.
For investors buying and selling multiple properties, a properly executed tax-deferred exchange, will defer all federal and state capital gains taxes.
Investors should seek proper tax advice before purchasing. There are several firms in Hong Kong that specialize in US tax planning and preparation including US Asia Tax (usasiatax.com).
Interest rates globally and in the US are at their lowest levels in the past 50 years.
Lenders in Hong Kong are offering financing for US properties ranging from 4 per cent to 4.5 per cent with loan-to-value ratios up to 60 per cent. US lenders are offering similar rates with loan-to-value ratios of 70 per cent.
“Most of our Asia clients have been obtaining financing in Hong Kong for their US purchases,” Consulina Wong, director of Asia for the ONEILL Group, said. “The Hong Kong lenders are easier to work with and can also provide refinancing loans under 2 per cent for the right borrowers”.
Financing has been a problem for the US domestic market, with many transactions being cancelled due to the buyer’s inability to qualify for loans.
“It really helps buyers’ negotiating power if they have a pre-approval letter from a bank before submitting an offer. If financing is not needed then we highly recommend a proof of funds letter from a financial institution” Wong said. Most residential real estate in the US is offered on freehold tenure. Most leasehold transactions are found in the commercial sector.
Although there are exceptions, average US real estate investors are encouraged to purchase freehold to avoid the potential burdens of limited financing, lease rent increases and decreased resale values.
In some of the hardest-hit housing markets, including Las Vegas and Miami, discounts of 50 per cent from the 2006 peak are still available.
In prime markets, such as Manhattan and Beverly Hills, experts are reporting that discounts of between 25 per cent and 30 per cent – the norm last quarter – are becoming harder to find as the overall market continues to improve.
Patrick William ONeill is chief executive of ONEILL Group, a US-based firm that specializes in international residential and commercial real estate.
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Hong Kong Real Estate Buyers Place Bets on Las Vegas Property
With zero capital gains tax and 60% discounts, Hong Kong real estate investors are descending upon Las Vegas.
Hong Kong January 28, 2010 — The bright lights of Las Vegas which have been dimming on the housing market since the peak of 2006 appear to be regaining their glimmer. Housing values have decreased 60% in many areas providing investors some of the best capital appreciation opportunities in the US and Hong Kong real estate purchasers have taken notice. The US real estate market ranked the number one choice for international purchasers ahead of the UK and China in a recent report released by Barclays Wealth.
Las Vegas real estate has long been a favorite of Asian investors due to the consistent economic growth and favorable tax structure – Las Vegas has no state long term capital gains tax on real estate. Asian investors also point out that Las Vegas provides a contrasting complimentary lifestyle to Asia. Ingrid Fu is a Hong Kong investor that now spends the majority of her time in Las Vegas, “I have never experienced a residential environment like One Queensridge Place with its gallery-like finishes, five-star amenities, exemplary services, high level security, and friendly homeowners” says Fu. One Queensridge Place is a completed condominium developed by Executive Home Builders and is considered by industry insiders as one of the top luxury developments in Las Vegas. “It is perfect for my lifestyle” she said.
“Queensridge Place is a great example of the opportunity that is available now in Las Vegas real estate” according to Patrick ONeill, CEO of the ONEILL Group an international real estate firm in Hong Kong. Condominium residences in One Queensridge Place that were selling at HK$15,500,000 are now selling for HK$6,200,000. “It is very hard to find this type of discounted pricing anywhere globally and extremely rare on these types of ultra luxury properties.”
US national home prices reported gains of 6% at the end of 2009 after falling 32% since 2006 according to the Standard & Poor’s / Case-Shiller home price index annual report. While regional data reports mixed signals, it appears that the Las Vegas market should begin to see improvement through 2010 with increasing domestic demand and international investing For Hong Kong real estate investors looking for alternatives to the bubble markets in Asia, the lights are shining bright on Las Vegas.
For additional information contact the ONEILL Group Hong Kong at 852 3103 1008 or visit www.ogrouphk.com The ONEILL Group is an international real estate firm with special focus on Asia, Australia and the US.
Hong Kong Buyers Place Bets on Las Vegas Property
With zero capital gains tax and 60% discounts, Hong Kong real estate investors are descending upon Las Vegas.
Hong Kong (January 27, 2010). The bright lights of Las Vegas which have been dimming on the housing market since the peak of 2006 appear to be regaining their glimmer. Housing values have decreased 60% in many areas providing investors some of the best capital appreciation opportunities in the US and Hong Kong real estate purchasers have taken notice. The US real estate market ranked the number one choice for international purchasers ahead of the UK and China in a recent report released by Barclays Wealth.
Las Vegas real estate has long been a favorite of Asian investors due to the consistent economic growth and favorable tax structure – Las Vegas has no state long term capital gains tax on real estate. Asian investors also point out that Las Vegas provides a contrasting complimentary lifestyle to Asia. Ingrid Fu is a Hong Kong investor that now spends the majority of her time in Las Vegas, “I have never experienced a residential environment like One Queensridge Place with its gallery-like finishes, five-star amenities, exemplary services, high level security, and friendly homeowners” says Fu. One Queensridge Place is a completed condominium developed by Executive Home Builders and is considered by industry insiders as one of the top luxury developments in Las Vegas. “It is perfect for my lifestyle” she said.
“Queensridge Place is a great example of the opportunity that is available now in Las Vegas real estate” according to Patrick ONeill, CEO of the ONEILL Group an international real estate firm in Hong Kong. Condominium residences in One Queensridge Place that were selling at HK$15,500,000 are now selling for HK$6,200,000. “It is very hard to find this type of discounted pricing anywhere globally and extremely rare on these types of ultra luxury properties.”
US national home prices reported gains of 6% at the end of 2009 after falling 32% since 2006 according to the Standard & Poor’s / Case-Shiller home price index annual report. While regional data reports mixed signals, it appears that the Las Vegas market should begin to see improvement through 2010 with increasing domestic demand and international investing For Hong Kong real estate investors looking for alternatives to the bubble markets in Asia, the lights are shining bright on Las Vegas.
For additional information contact the ONEILL Group Hong Kong at 852 3103 1008 or visit www.ogrouphk.com The ONEILL Group is an international real estate firm with special focus on Asia, Australia and the US.
Square Foot Magazine Hong Kong – Has the US Housing Market Hit the Bottom?
Patrick William ONeill – January 25, 2010
Has the US housing market hit the bottom? While experts are cautious to say that a full recovery has begun most agree that the market is at or near the bottom as the proverbial green shoots begin to appear across the nation. Since the market peak in 2006, US national homes prices have fallen 32% according to the Standard & Poor’s / Case-Shiller home price index annual report. The index also indicates the initial rebound of home prices with gains over 6% reported at the end of 2009.
According to the National Association of Realtors (NAR) November 2009 report, the seasonally adjusted number of existing homes sales was up 44.1% compared to one year ago and up 7.4% since the preceding month. The trend of increased sales numbers began in 2008 with gains posted in 9 of the last 12 months. In hard hit areas like southern California, Las Vegas, Phoenix and Florida local real estate agents report that sales volume has been improving through 2009. “Although prices have not dramatically improved, we have certainly seen an increase in sales activity in the South Florida market, “ says Sandra Shine, a 35 year real estate veteran in Palm Beach County. “Buyers are looking for value but understand that these low prices will not last much longer”.
While value retracements of over 60% are common in the hard hit areas of the US, prime cites like Manhattan, Boston and Washington DC experienced lesser discounting in the ranges of 20%-25%. These prime cities have also seen an explosion of sales volume according to the NAR report with year over year volume increases of New York 44%; Boston 58.2%; Washington DC 31.8%. “We believe the first quarter of 2009 will mark the bottom of the condominium market in Washington DC” says Chris Ballard of the Washington DC based McWilliams Ballard real estate firm specializing in new home sales in the Mid Atlantic states. “The first quarter of 2010 is looking to be the strongest first quarter in over three years. It seems that many purchasers have been waiting for the right moment to buy and now, like we, sense that this is the bottom.”
Another factor that is boding well for the US market is the amplified interest from international buyers. After contracting 2.2% in 2009, the global economy is projected to expand 2.7% fueled in part by Asia, according to the World Bank. In a recent survey released by Barclays Wealth, the US is the number one country of interest for foreign purchasers. The combination of low prices, week US dollar and low interest rates propelled the US past the second place countries of the UK and China.
US properties are also preferred by foreign purchasers as a result of the favorable tax treatment for foreigners. “Many of our Asia clients are surprised at the favorable tax treatment for US properties. Most of the tax benefits associated with investment property in the US are available to foreigners making it a favorable place to own. For example, the Federal long term capital gain tax for properties held for over one year is 15%. This is the same rate for foreigners and US citizens. In places like Las Vegas, Nevada or Florida with no state income tax, only the federal rate of 15% may be applicable. ” according to Agnes Chang, a US CPA, and a senior tax consultant of the Hong Kong based firm US Asia Tax & Business Services Ltd.
Skeptics of an improving market point to the fact that 2009 benefited from several artificial stimuli including the Federal tax credit, aggressive FHA lending policies and the low interest rates maintained by the Federal Reserve. While it appears that 2010 will also benefit as the Obama administration has obtained an extension on the tax credit and the Fed has indicated that rates will remain low throughout the year, market experts are following the job growth and new home indices as indications of the fundamental strength of the housing market. Whether the US market has hit the absolute bottom may be debatable however both the skeptics and the optimists agree that the residential market is certainly poised for recovery sometime in 2010.
Patrick William ONeill has over 25 years of international real estate experience. He is the CEO of the ONEILL Group a US based firm that specializes in international residential and commercial real estate. The firm is currently working with individual and institutional clients in Asia, Australia, UK and the United States. www.ogroupinternational.com
Patrick ONeill obtains Hong Kong Estate Agents License
Hong Kong. Patrick ONeill of the ONEILL Group has obtained the designation of Estate Agent in Hong Kong from the Estate Agents Authority. The Estate Agents Authority was founded in 1997 under the Estate Agents Ordinance to regulate the practice of estate agency in Hong Kong, promote integrity and competency, facilitate training and enhance standards and practices.
South China Morning Post
Patrick William ONeill – ONEILL Group Hong Kong
Contributing Writer
June 23, 2010
In a recent interview in the United States, property magnate Donald Trump is quoted as saying: “This is the best time I’ve ever seen to buy real estate”. It appears that Hong Kong investors agree.
In a Barclays Wealth survey, Hong Kong investors overwhelmingly selected the US as the top destination of interest for this year, with Britain and the mainland tied for second place.
The surge in interest is fuelled by a combination of low prices and historically low interest rates. Average US home prices fell by more than 30 per cent since they peaked in 2006, with experts agreeing that the market hit bottom in mid-2009. In some hard-hit cities, including Las Vegas, Phoenix, and Miami, prices fell by more than 50 per cent. Since then prices have stabilized and modest gains were reported in major markets in the first quarter of this year. During this same period interest rates dropped to levels not seen since the 1950s.
The following are compiled tips for individual investors looking to purchase residential properties in the US.
Engage a buyer-side agent
Most property transactions in the US involve separate agents representing the buyer and seller. The good news for buyers is that the sellers typically pay all commissions including the buyer’s agent. Commonly, the seller pays a total commission of 5%-6% which is shared equally between the two agents. When representing a buyer, real estate agents have a strict legal fiduciary responsibility to protect the best interest of the buyer. The agent will help in all areas including research, finance, legal, valuations, negotiations and contracts. Most agents will require an exclusive agreement and some charge small refundable retainers for the services.
Identify the goals of ownership
The US markets are not homogeneous and provide diverse buying opportunities. Some markets provide better capital appreciation opportunities while others provide better rental yields. While some markets have dropped substantially, prime markets such as New York, Washington DC and Boston have experienced smaller price corrections but have the advantages of low rental vacancies and strong cash flow.
Research the market
The US real estate markets are among the most transparent in the world allowing buyers to research and understand values with confidence. The comparable market analysis (CMA) provided by buyer agents will outline the comparable properties that are for sale and those that have recently sold. This is the same information used by appraisers and surveyors to establish values for lending institutions. Investors can also access numerous public websites to obtain information of property values, demographic and rental income. The most popular sites include zillow.com, ziply.com and realtor.com.
Plan the ownership and tax structure
The US encourages property ownership with numerous tax advantages for property owners that are available to both US citizens and foreign purchasers. With properly planned ownership and tax structure, taxes will be minimized and in some cases completely deferred.
The current US federal long term capital gains tax rate for real estate is 15% which is applied to the net profit of property sold after one year. This rate applies to properties in all states of the US. In some states an additional state capital gains tax is applied. Other states including Florida, Nevada and Texas have no state capital gains tax. For investors buying and selling multiple properties a properly executed 1031 tax deferred exchange, will defer all federal and state capital gains tax.
There are several firms in Hong Kong that specialize in US tax planning and preparation including US Asia Tax usasiatax.com.
Obtain pre-approved financing
Interest rates are at the lowest levels in the past 50 years. Lenders in Hong Kong are offering financing for US properties ranging from 4.0%-4.5% with loan to value ratios up to 60%. US lenders are offering similar rates with loan to value ratios of 70%. “Most of our Asia clients have been obtaining financing in Hong Kong for their US purchases” says Consulina Wong Director of Asia for the ONEILL Group a property firm specializing in United States properties. “The Hong Kong lenders are easier to work with and can also provide refinancing loans under 2% for the right borrowers”. Financing has been a problem for the US domestic market with many transactions cancelling due to the buyer’s inability to qualify for loans. “It really helps the buyer’s negotiation power if they have a pre-approval letter from a bank before submitting an offer. If financing is not needed then we highly recommend a proof of funds letter from a financial institution” says Wong.
Buy freehold property
The vast majority of residential real estate in the US is offered in freehold tenure. Most leasehold transactions are found in the commercial sector. Although there are exceptions average US real estate investors are encouraged to purchase in freehold to avoid the potential burdens of limited financing, lease rent increases and decreased re-sale values.
Set realistic expectations
In some of the hard hit housing markets like Las Vegas and Miami discounts of 50% from the 2006 peak are still available for investors. In prime markets such as Manhattan the number of sales has increased dramatically compared to last year leading to price stabilization and increases. “Sales volume doubled in the first quarter of 2010 compared to last year and the average sales price is up 10% compared to last quarter” says Kathryn Higgins of DJK Residential in Manhattan. “Last week we closed a sale for a Hong Kong investor with a discount over 30% but finding the deep discounts is becoming more difficult”.
In Beverly Hills, another prime market, agents are reporting that the discounts seen last year are becoming harder to find as the market continues to improve. “Last year discounts of 35%-40% from the peak were the norm even in our top areas. We are currently working with a Hong Kong buyer and it is very difficult to find discounts of even 30% in the prime West LA areas” says Chris Jones of Keller Williams Real Estate in Los Angeles.
Most experts project mixed signals from the US housing market through 2011. The expiration of the stimulus housing tax credit and expected rising interest rates will have negative impacts on the national housing statistics. At the same time, regional job growth and continued foreign investment will continue to boost prime market areas. Despite the mixed signals it appears that Hong Kong investors will continue to take advantage of what is possibly the best time to buy US real estate in the last 50 years.
Patrick William ONeill is the CEO of the ONEILL Group a firm that specializes in international residential and commercial real estate.
SOUTH CHINA MORNING POST
Updated story 6.23.10
South China Morning Post
Peggy Sito
June 2, 2010
Hong Kong remains in demand as a platform for overseas developers to market their projects to cash-rich Hong Kong and mainland buyers, property consultants say.
While financing becomes a major problem in domestic markets after the global financial crisis, developers have shifted to external demand in other countries.
“A story behind the trend is that they hope to attract capital from affluent mainland Chinese,” said Simon Lo, a director of research and advisory at property consultancy Colliers International Hong Kong.
Mainland buyers had once boosted prices of Hong Kong luxury homes to new highs, Lo said, but since the government here and on the mainland had introduced policies to regulate rocketing home prices, a mood of uncertainty had emerged.
Developers of overseas properties hoped to use this as an opportunity to market their projects to attract mainland funds, he said.
Hong Kong buyers and expatriates remained as their major demand, said Patrick ONeill, whose company is marketing a condominium project in Los Angeles.
O’Neill said financing was a major problem in markets such as the United States where buyers found it difficult to arrange financing while banks tightened credit.
The 224 units being marketed by ONeill are located on floors 27 to 52 atop the newly opened Ritz-Carlton Hotel Los Angeles.
The building is part of the LA Live entertainment complex which includes the Staples Centre, Nokia Theatre, Grammy Museum, cinemas, restaurants and other shops and entertainment venues.
The one, two and three-bedroom residences range in size from 980 to 4,230 sq ft, with prices starting at HK$6.63 million. The penthouse units located on floors 50 and 52 are more than 5,000 sq ft and one penthouse of 5,426 sq ft is available at HK$76.16 million.
First occupancies are projected for November.
Experienced investor Darryl Dong, who just bought a condominium unit in Sutton Place, New York, at a price one third of its peak level, said it was an ideal time to buy New York properties or properties in the US.
National home prices in the US peaked in 2006 and dropped about 30 per cent to a trough reached in the middle of last year, according to the Standard & Poor’s Case Shiller Home Price Index.
Buyers interested in offshore properties will have a large choice on offer at a property show to be held in Hong Kong this weekend. On show will be investment properties from Malaysia, Thailand, Australia, Spain, Canada, the US, Bali and many other destinations. To attract buyers, the organiser of the Smart Investment & International Property Expo said it was selling the concept of buying overseas properties at just 10 per cent of Hong Kong prices.
Another exhibition will promote homes on the east coast of Australia from Sydney to Port Douglas, including the Byron Bay home of famous Australian actor Paul Hogan (Crocodile Dundee) called Cedar Springs.
Hong Kong remains in demand as a platform for overseas developers to market their projects to cash-rich Hong Kong and mainland buyers, property consultants say.
While financing becomes a major problem in domestic markets after the global financial crisis, developers have shifted to external demand in other countries.
“A story behind the trend is that they hope to attract capital from affluent mainland Chinese,” said Simon Lo, a director of research and advisory at property consultancy Colliers International Hong Kong.
Mainland buyers had once boosted prices of Hong Kong luxury homes to new highs, Lo said, but since the government here and on the mainland had introduced policies to regulate rocketing home prices, a mood of uncertainty had emerged.
Developers of overseas properties hoped to use this as an opportunity to market their projects to attract mainland funds, he said.
Hong Kong buyers and expatriates remained as their major demand, said Patrick ONeill, whose company is marketing a condominium project in Los Angeles.
O’Neill said financing was a major problem in markets such as the United States where buyers found it difficult to arrange financing while banks tightened credit.
The 224 units being marketed by ONeill are located on floors 27 to 52 atop the newly opened Ritz-Carlton Hotel Los Angeles.
The building is part of the LA Live entertainment complex which includes the Staples Centre, Nokia Theatre, Grammy Museum, cinemas, restaurants and other shops and entertainment venues.
The one, two and three-bedroom residences range in size from 980 to 4,230 sq ft, with prices starting at HK$6.63 million. The penthouse units located on floors 50 and 52 are more than 5,000 sq ft and one penthouse of 5,426 sq ft is available at HK$76.16 million.
First occupancies are projected for November.
Experienced investor Darryl Dong, who just bought a condominium unit in Sutton Place, New York, at a price one third of its peak level, said it was an ideal time to buy New York properties or properties in the US.
National home prices in the US peaked in 2006 and dropped about 30 per cent to a trough reached in the middle of last year, according to the Standard & Poor’s Case Shiller Home Price Index.
Buyers interested in offshore properties will have a large choice on offer at a property show to be held in Hong Kong this weekend. On show will be investment properties from Malaysia, Thailand, Australia, Spain, Canada, the US, Bali and many other destinations. To attract buyers, the organiser of the Smart Investment & International Property Expo said it was selling the concept of buying overseas properties at just 10 per cent of Hong Kong prices.
Another exhibition will promote homes on the east coast of Australia from Sydney to Port Douglas, including the Byron Bay home of famous Australian actor Paul Hogan (Crocodile Dundee) called Cedar Springs.
Hong Kong key link for overseas developers to mainland buyers
Peggy Sito
Jun 02, 2010 SOUTH CHINA MORNING POST
Hong Kong remains in demand as a platform for overseas developers to market their projects to cash-rich Hong Kong and mainland buyers, property consultants say.
While financing becomes a major problem in domestic markets after the global financial crisis, developers have shifted to external demand in other countries.
“A story behind the trend is that they hope to attract capital from affluent mainland Chinese,” said Simon Lo, a director of research and advisory at property consultancy Colliers International Hong Kong.
Mainland buyers had once boosted prices of Hong Kong luxury homes to new highs, Lo said, but since the government here and on the mainland had introduced policies to regulate rocketing home prices, a mood of uncertainty had emerged.
Developers of overseas properties hoped to use this as an opportunity to market their projects to attract mainland funds, he said.
Hong Kong buyers and expatriates remained as their major demand, said Patrick ONeill, whose company is marketing a condominium project in Los Angeles.
O’Neill said financing was a major problem in markets such as the United States where buyers found it difficult to arrange financing while banks tightened credit.
The 224 units being marketed by ONeill are located on floors 27 to 52 atop the newly opened Ritz-Carlton Hotel Los Angeles.
The building is part of the LA Live entertainment complex which includes the Staples Centre, Nokia Theatre, Grammy Museum, cinemas, restaurants and other shops and entertainment venues.
The one, two and three-bedroom residences range in size from 980 to 4,230 sq ft, with prices starting at HK$6.63 million. The penthouse units located on floors 50 and 52 are more than 5,000 sq ft and one penthouse of 5,426 sq ft is available at HK$76.16 million.
First occupancies are projected for November.
Experienced investor Darryl Dong, who just bought a condominium unit in Sutton Place, New York, at a price one third of its peak level, said it was an ideal time to buy New York properties or properties in the US.
National home prices in the US peaked in 2006 and dropped about 30 per cent to a trough reached in the middle of last year, according to the Standard & Poor’s Case Shiller Home Price Index.
Buyers interested in offshore properties will have a large choice on offer at a property show to be held in Hong Kong this weekend. On show will be investment properties from Malaysia, Thailand, Australia, Spain, Canada, the US, Bali and many other destinations. To attract buyers, the organiser of the Smart Investment & International Property Expo said it was selling the concept of buying overseas properties at just 10 per cent of Hong Kong prices.
Another exhibition will promote homes on the east coast of Australia from Sydney to Port Douglas, including the Byron Bay home of famous Australian actor Paul Hogan (Crocodile Dundee) called Cedar Springs.
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Huang Dawei 黄大炜 Visits the ONEILL Group Hong Kong Office
Top China music star attends US and Australia real estate conference
Hong Kong March 31, 2010 International recording artists and celebrity Huang Dawei (黄大炜) recently visited the offices of the ONEILL Group Hong Kong. Huang attended a VIP gathering of real estate investors interested in the US and Australia real estate markets.
“It was a real thrill for our entire team to have Huang in attendance. I have been a big fan of his music for many years and saw him perform at the Beijing Olympics and several times in Taipei” said Patrick ONeill, the CEO of the ONEILL Group. “He graciously signed autographs and posed for a few pictures”.
Huang Dawei is best known throughout the Mandarin world as a music icon and television personality. He has racked up multiple number one hits and garnered many awards including the Best Male Singer China, Most Influential China Artist 2010 and MTV Top Video Awards. When asked about his real estate plans Huang said “it seems like the US market is the place to be and I am here today to learn more.”
The real estate conference was hosted by the ONEILL Group Hong Kong and explored the current market conditions in the US and Australia. “Clearly the prices have tumbled in the US since the peak of 2006” said ONeill. “In the major cities like New York and Los Angeles, the prime real estate markets are already rebounding. In secondary areas such as Las Vegas and South Florida there are still plenty of distressed properties. Australia real estate has not swung wildly like many of the other major markets and is on track to continue its slow and steady pace.”
So where is Huang interested in buying? “Sorry”, said ONeill “we keep all of our client information confidential.” The ONEILL Group is an international real estate firm with offices in Hong Kong and the United States.
Washington DC Area Condominium For Sale in Hong Kong
The Waterview designed by IM Pei offers final release to Hong Kong market
December 18, 2009 (Hong Kong) The Waterview, a luxury condominium residence in the greater Washington DC area, has released the last few remai