Tips for Hong Kong Buyers Looking to Invest in the UK Property Market

Posted in Ask An Estate Agent, Before You Buy

Unless you’ve been taking self-isolation to the extreme, you’ll be aware of the recent political developments in Hong Kong — more specifically, the enactment of the national security law — and how it’s been a cause of international concern.

As a result, leaders of countries such as Canada and the United Kingdom have suggested reassessments to their visa systems, offering Hong Kong residents new routes towards citizenship, should they feel the need to relocate. Yesterday, on 22 July 2020, the United Kingdom became the first to confirm its renewed visa policy, specifically directing to the three million British National (Overseas) passport holders in Hong Kong.

According to the statement, Hong Kong’s BNO holders can apply for a special visa starting in January 2021, which will allow them the right to work and study in the UK for up to five years. They will then be able to apply for settlement, and seek citizenship after a further year.

Many are expecting an influx of affluent Hong Kong citizens moving to the UK following such an announcement, especially over the next 12 months. In response to these developments, London-based Montague Real Estate is establishing a new division — of Cantonese translators, legal experts and lifestyle advisors — to help meet this anticipated demand for premium properties for High Net Worth Hong Kong citizens. We’ve gotten in touch with founder and CEO Thomas Balashev, who shared with us some of his knowledge of the UK’s prime residential property market, as well as tips and advice to those seeking to relocate to the country.

Can you tell us a bit about the prime residential property market in the UK?

TB: The UK property market has always been a prime investment opportunity for international buyers, including those in Asia. London isn’t just a desirable place to live and do business, it is a stable and reliable point for investment. With world-class educational institutions, a stable economy and a central hub for business internationally, the UK property market makes for an attractive investment. This, coupled with the current nine-month stamp duty holiday the UK government has introduced [from 8 July 2020 to 31 March 2021], has created an injection into the market meaning it is a prime time to buy in the UK with some buyers saving on additional costs. 

As the current economy has seen the majority of the UK working from home, and with many organisations looking to continue this for the foreseeable future, consumers have become more aware of their space at home, both inside and out — which has become a priority for buyers. Buyers are now not only looking for a definitive line between working and living, but private outside space which has meant that houses have become more popular than flats. 

Five bedroom terrace house for sale in Knightsbridge, London

How would the surge in demand for premium residential properties from Hong Kong affect the current market?  

TB: Whilst it is, of course, natural that demand will increase following the announcement from the UK government and current political position in Hong Kong, London has, and always will be a favoured destination to buy and invest for overseas clients. With over 200,000 properties in London being owned by Asian clients, we have seen an increase in activity from Hong Kong buyers over the last two to three years. Some may question inventory levels as a result of the surge, but the majority of our previous transactions for our HNW and UHNW clients have happened off-market so inventory is never an issue. 

So far which areas are of particular interest to Hong Kong buyers? Are there different areas suited for young professionals, families, and older demographics?

TB: Neighbourhoods in London, like anywhere, have different offerings which naturally appeal to different clients. Our previous buyers have taken interest in Knightsbridge, Belgravia and Islington. However, we often see younger clients such as students and young professionals opt for regenerated spaces in East London which reflect the high-rise living they are accustomed to in Hong Kong. These developments usually come with serviced living options and progressive smart home interiors making them as modern and sophisticated as possible.  

With that being said, a number of clients invest in areas surrounding open spaces such as Hyde Park and Richmond Park. These locations offer an escape and the more natural side of London — something that isn’t overly accessible in Hong Kong. Our clients with families, however, have taken an interest in our super-prime listings in the home counties such as Surrey and Kent, with accessible links to central London and key airports for global travel. 

11 bedroom detached house for sale in Surrey

Are there any legal restrictions for overseas buyers with a BNO passport? 

TB: The details of the BNO visa are yet to be fully revealed. However, having a five year stay assured would allow buyers to feel confident in investing in an area like London, knowing they can build a life and a future here.

Any advice for those who might not wish to relocate yet, but looking to invest in a property to hold on to or rent out for now as a safety plan?

TB: Foreign investors buying properties in London with a view to rent them out has always proved popular. There is a strong rental market in London suiting all budgets, with a quarter of all those aged under 40 in the UK looking to rent. The devaluation of the Pound Sterling over the last few years also makes now an excellent time to buy.

Depending on a foreign investor’s circumstances, they may or may not need to pay income tax on their rental income. However, in the long term, investing in a property will be a steady source of income whilst providing an option to relocate permanently.

What should Hong Kong buyers be aware of before deciding on a purchase in the UK?

TB: Buyers looking to invest into the UK property market should be aware that there are different requirements for different types of property acquisitions. These requirements will also differ between buy-to-let and buying for residential purposes.

The recent [reduced rates for stamp duty land tax] mean that until 31 March 2021 buyers will only have to pay stamp duty on properties over £500,000 (previously it was set at £125,000, or £300,000 for first-time buyers), but note that the government does implement a ‘holding charge’ on residential properties valued at over £2 million owned by non-UK domiciled persons. As for those from abroad who don’t live in the UK, don’t have UK citizenship, and don’t want to pay in cash, it is of course still possible to secure a buy-to-let mortgage in the UK to cover the property purchase price.

Thomas Balashev is the founder and CEO of Montague Real Estate, a London-based boutique real estate firm and private office specialising in complex global property investments and acquisitions. Balashev’s involvement in the property space stretches a decade, partnering with key developers in Cyprus, Dubai and Mainland Europe to provide luxury real estate to his clients across the globe.

Cindie Chan

What to Know Before You Buy Property in Kuala Lumpur

Posted in Before You Buy

If buying property in Kuala Lumpur isn’t something to which you’ve given any thought, you really should reconsider. After all, Malaysia’s property market is open to foreign investment, and recent changes to the law will soon make it easier than ever to add a home in Kuala Lumpur — or Johor Bahru, Penang, or Melaka — to your portfolio. 

Add to that a resilient economy, the ease of doing business, affordable property prices, low buying costs, financing options, and a lack of restrictions on the free flow of capital, and buying in Kuala Lumpur starts to seem like a no-brainer. Below, we’ve compiled the most important facts and figures you should know before you think about making any purchase. As always, be sure to seek professional legal advice as laws are subject to change, and to engage an experienced attorney to handle the paperwork.

What type of property can you purchase?

Unlike other, more restrictive economies, Malaysia allows foreign buyers to own unlimited freehold (full, permanent ownership) and leasehold (typically 99-year ownership) properties of any type, from apartments to single-family homes and so on — there are more than a dozen property categories in total. That being said, any acquisition of property by non-citizens or foreign companies requires prior approval from the relevant State Authority before it can be completed.

What’s the easiest way to finance the home?

There’s no limit on how much money foreign citizens can hold in accounts at Malaysian banks, so the easiest way to finance your new home purchase would be to arrange the funds in your home country and then transfer them. Alternatively, banks such as CIMB and UOB offer home loans designed for foreign buyers, so they’re a great place to start your search. Generally speaking, mortgage loans in Malaysia have average interest rates of 4-5%. Buying costs usually fall in the same range.

What’s the minimum purchase price?

Responding to an oversupply of properties on the market, the government recently announced that, for a one-year period starting from 1 January 2020, the minimum purchase price for property in urban high rises will be lowered from RM1 million (approx HK$1.89 million) to RM600,000 (approx. HK$1.14 million) for foreign buyers. There’s plenty of property to snatch up, too: Kuala Lumpur currently has RM2.05 billion worth of unsold units priced at RM600,000 and above, according to the Finance Ministry.

What else do I need to know?

If residing or retiring in Malaysia is something you’re considering, it’s best to apply for the Malaysia My Second Home (MM2H) Programme, which grants foreigners a 10-year visa plus access to more favourable financing rates as well as lower minimums on property purchases, though the actual figures vary from state to state. MM2H visa holders enjoy a host of other benefits as well, such as tax-free remittance of foreign income, ability to import a car, ability to bring a domestic helper, and more.

Michael Alan Connelly
A Chicagoan by birth and a New Yorker by habit, Michael has more than a decade of experience in digital publishing at leading titles in the U.S. and Asia. When he's not checking out Hong Kong's newest restaurants and bars or jet setting around the globe, you'll find him hanging out with his dog Buster and enjoying an Aperol Spritz.

Market Focus: Why Kuala Lumpur is an Increasingly Attractive Property Market

Posted in Before You Buy

While Hong Kong, Singapore, Shanghai and Bangkok boast all the dynamism and glitz commonly associated with the modern luxury lifestyle in Asia, Malaysia’s relatively chilled capital Kuala Lumpur is viewed as a safe haven in troubled economic times. Throw excellent regional travel connections, unrivalled tropical vacation opportunities and outstanding dining into the mix, and it’s easy to see why KL is increasingly an attractive destination for high-end property investment from across the region.

Much like neighbouring Thailand, however, Malaysia is suffering from a glut of unsold homes, in this case due to overbuilding, demand mismatch and currency depreciation in recent years (the ringgit has dropped 16 per cent in value against the US dollar since 2014). According to data released by the Malaysian Ministry of Finance in October, the number of unsold properties across the country stood at 54,078 units at the end of the first quarter of 2019, valued at 37.2 billion ringgit (RM37.2 billion, about HK$70 billion), with residential units accounting for the bulk.

“The property market in Kuala Lumpur and Malaysia appears to be bottoming out, although it will take some time before the market sees any significant growth,” says Sarkunan Subramaniam, managing director at property consultants Knight Frank Malaysia. “The market is expected to improve gradually with support from various government initiatives.” These include a lower price threshold for foreign buyers of high-rise property in urban areas from RM1 million to RM600,000 in 2020.

That said, the Malaysian property market – and particularly that of KL – has witnessed an influx of investment in 2019, mostly from elsewhere in Asia, for multiple reasons, with premium properties pulling in a substantial share. Anxiety arising from anti-government protests in Hong Kong has resulted in local capital flowing into Southeast Asia, with Malaysia viewed as an especially dependable refuge from instability.

A unit at the YOO8 serviced residence at 8 Conlay, scheduled for completion in 2021.

Other factors include healthy Malaysian GDP growth of 4.7 percent in 2018, and confidence buoyed up by pro-investment policies of the new Pakatan Harapan government, voted in that same year. On the whole, however, simple, no-nonsense bang-for-buck considerations have been key to KL’s growing attractiveness for overseas cash.

With Hong Kong, Singapore, Shanghai, and Beijing all now boasting some of the most expensive residential property prices not just in Asia but worldwide, humble Malaysia – according to data recently released by international property consultant CBRE – currently rests in 24th position on the global average house-price list. CBRE’s Global Living 2019 report states that the average price for a “prime property” in Hong Kong now tops US$6.8 million, while in Singapore it would be in excess of US$1.2 million. The average for such a home in KL is less than US$500,000.

“This makes luxury property in Kuala Lumpur and Malaysia very affordable for investors from these regions,” says Danny Broadfield, CBRE’s associate director, International Project Marketing Asia.

Subramaniam at Knight Frank, meanwhile, defines a premium KL property as “generally priced above the RM1 million mark, or above RM1,000 per square foot on built-up area. Currently, the cumulative supply of luxury property totalled approximately 57,000 units, or circa 10 per cent of the total supply, in Kuala Lumpur.” 

Kelly Hoppen-designed bedroom at YOO8 serviced residence.

Looking at branded residences operated by hotel chains (popular examples include The Residences at The St. Regis Kuala Lumpur and Four Seasons Private Residences), Subramaniam adds that there are in the region of 2,400 finished units in central KL alone. “In the near future, another 2,000 units are expected to be completed,” he says. “These new branded residences are generally priced above RM2,300 per square foot.”

With nearly a quarter of Malaysia’s total population of more than 30 million being ethnically Chinese, and the proportion leaping to more than 40 percent in KL, investors from mainland China and Hong Kong feel especially welcome in the city, and so they are the most enthusiastic outside buyers of KL homes. The national government has further encouraged this phenomenon with fast-track residency visas for the wealthy, most notably through the Malaysia My Second Home (MM2H) programme. 

“You have a similar time zone, a world-class airport in Kuala Lumpur International Airport, good road connectivity and rail systems, great food, people and culture, all teamed with Mandarin-speaking locals,” enthuses Hong Kong-based Broadfield. The SAR is less than four hours away from KL by air, with Bali being under three hours and Singapore less than an hour’s flight time, or seven hours by rail.

Indeed, though recent years have been challenging for local developers, according to Global Living 2019, “The luxury, high-rise segment [in KL] is largely a foreign investors’ market … High levels of existing supply in this market may moderate launch activity in the in the near future, as the current inventory is being absorbed. These dynamics also mean that prospective buyers of luxury property are currently at an advantage, with many investment opportunities available.”

Although there are low-density pockets of high-wealth-individual homes scattered across Kuala Lumpur (see Damansara Heights, Desa ParkCity, Taman Tun Dr Ismail and Imbi, among others) luxury residences tend to be clustered in the city centre, most notably in the high-rise district known by the acronym KLCC. This sprawling, multipurpose “city within a city”, is characterised by statement architecture (most notably the iconic Petronas Twin Towers), five-star hotels (including the Mandarin Oriental Kuala Lumpur, Grand Hyatt Kuala Lumpur and InterContinental Kuala Lumpur, among others) and upscale designer-driven shopping malls.

Other areas to consider include neighbouring Bukit Bintang, U-Thant and Ampang Hilir, immediately east of KLCC. Encompassing the city’s embassy enclave, these areas also provide doorstep access to quality-lifestyle amenities such as spacious, leafy parks of orchid gardens and choreographed fountains, international schools and top-flight medical care, convenient municipal transport infrastructure, varied nightlife, even the prestigious Royal Selangor Golf Club.

Steve Leung-designed unit at YOO8 serviced residence.

The high-end residential property currently generating the most buzz in KLCC is 8 Conlay, a mixed-used freehold development on Jalan Conlay, its three towers – the tallest rising 68 stories – set to become the loftiest residential structures in all of Southeast Asia when they are completed in 2020 and 2021. Two of the towers will comprise the YOO8 Branded Serviced Residence, with more than 1,000 one, two and three-bedroom units ranging in size from 700 square feet to 1,308 square feet. The third tower will be the Kempinski Hotel and Residences.

This ambitious, US$1.3 billion complex is a design-driven collaboration between RSP Architects Kuala Lumpur, the Philippe Starck co-founded interior-design firm Yoo, and Bangkok-based landscaping experts Trop. Clearly tugging a forelock in the direction of 8 Conlay’s most likely buyers, the development draws aesthetically on the yin-yang concept and the Chinese character for the lucky number eight.

Residential units in 8 Conlay’s Tower A, with creative input from Hong Kong interior designer Steve Leung, feature distinctively Asian flourishes, while Britain’s Kelly Hoppen offers a more minimalistic approach through two distinct interiors concepts, Urban and Spring, in Tower B. YOO8’s Water Lounge on level 26 of Tower B features a 25-metre pool, rainforest-inspired ripple pools and pod-like cabanas. The multi-level Green Refuge “park in the sky” accessed from the 44th floor evokes Balinese rice terraces and features a jogging path.

Priced at less than US$800 per square foot, YOO8 comes in at a fraction of the US$2,000 required for similar luxury at 98 Wireless in Bangkok, or the more than US$4,000 needed for a Yoo Residence home in Hong Kong’s Causeway Bay. According to developer KSK Land, non-Malaysians currently account for 75 per cent of YOO8’s buyers, with half of those coming from Hong Kong and mainland China.

For those who cannot wait, one of the most sought-after luxury condominium developments already completed in KL is Le Nouvel KLCC, its striking glass facade liberally decorated with lush greenery details and rising over Jalan Ampang, one of the oldest and most prestigious thoroughfares in the city. At the time of writing, a 2,110-square-foot, three-bed unit in Le Nouvel KLCC, with white marble flooring, Poggenpohl-designed kitchens and Miele appliances, was up for grabs for RM5.48 million.

Le Nouvel KLCC

The 2016 creation of Pritzker-winning French architect Jean Nouvel – who collaborated with such design luminaries as lighting guru Hervé Descottes, interiors specialist Koichiro Ikebuchi and landscape artist Patrick Blanc – Le Nouvel KLCC houses 195 light-filled homes (including one to four-bed apartments and a small number of penthouses) over two towers rising 43 and 49 levels, with a pool deck on floor seven and a panoramic Sky Bridge on level 34 housing inviting lounges and fine dining.

Other luxury favourites in the vicinity include popular service-residence tower Banyan Tree @ Pavilion, The Face Platinum Suites and Tropicana The Residences, the latter occupying the 25th to 53rd floors of a sleek, 55-storey tower designed by Chicago-headquartered architectural giant Skidmore, Owings & Merrill, the company that’s also behind Dubai’s Burj Khalifa and New York’s One World Trade Centre. The property is managed by Tropicana Corporation Berhad, and shares space with the upscale W Hotel below.

Heading away from the city centre, to the leafy and affluent suburb of Damansara Heights, freehold development Aira Residence is a fine choice for luxury buyers who prefer to keep a lower profile. In the words of its developer, this luxurious condominium complex of 105 units – designed by an international team jointly headquartered in the Netherlands and Singapore, and completed in 2019 – offers  “the choice of either immersing themselves in urban activity or retiring to the privacy and peacefulness of their own homes”.

Aira Residence

Aira Residence’s 105 residential units, ranging in size from 2,679 to 7,730 square feet, were priced at launch between RM4.6 million and RM13.5 million. In keeping with the tranquil, natural environment, the complex is equipped with a rain harvesting system, bio-ponds, energy efficient lighting, and low emissivity glass coatings that minimise UV and infrared light, thereby reducing solar heat transmitted to interiors. 

“In an attempt to differentiate the product offerings, we now see more developers incorporating eco-friendly initiatives and aesthetic features with unique architecture design into their projects,” Subramaniam says of current market trends. “Luxury properties with higher product specifications can be seen as a catalyst to enhance the image of an area while also having a positive impact on real estate values.” 

Looking to the future, the general view of KL property experts is that new supply of luxury residences in the Malaysian capital is expected to be limited in coming years, or to come online at a slower rate than previously.

“As with many developing countries, the priority is to introduce physical and technical improvements that will bring Kuala Lumpur up to par with other advanced cities,” says CBRE’s Broadfield. “Above all, Kuala Lumpur is a modern city that retains a relaxed lifestyle and has plenty of future potential. With demand for luxury properties from overseas investors high and limited new supply, this will have a positive upwards pressure on property pricing.”

Gary Jones

What to Know Before You Buy Property in Thailand

Posted in Before You Buy

Buying property in Thailand — Bangkok in particular — is an attractive proposition. The luxury-property sector is booming and prices are far cheaper than those you’ll find in Hong Kong. However, there are certain factors, listed below, you need to be aware of before you consider making a purchase. And be sure to consult an attorney — laws change all the time, after all. 

  1. Foreign citizens are generally forbidden from owning land in Thailand, so many overseas buyers opt for the simplicity of buying a condominium. It’s permitted as long as no less than 51 percent of the total area of all units in a residential project is owned by Thai citizens.
  2. If you wish to buy or build a stand-alone home, you’ll need to obtain a 30-year lease from the landowner. Alternatively, you can form a limited company in Thailand with a combination of foreign and Thai ownership, although no more than 49 percent of the shares can be foreign owned; such a company has the right to own land.
  3. A foreigner is permitted to own land — up to one rai (1,600 square metres) — if he or she provides a minimum of 40 million baht to invest in specified Thai businesses and has received approval from the Ministry of the Interior.
  4. Most buyers from Hong Kong purchase new, off-plan developments, for which the procedure is straightforward: select condo, pay HK$20,000 booking fee, pay a 10 percent deposit within the following two weeks, pay another 10 percent deposit after signing the sales and purchase agreement, then pay the remainder once the property is finished and the transfer of ownership is made by the developer.
  5. If you want to buy a property with cash, you’ll first have to transfer the total amount in Hong Kong or US dollars to a bank account in Thailand before continuing the process. If you wish to get a mortgage, chances are you’ll need to apply for an international bank loan from the likes of UOB, ICBC or Bank of China.
Michael Alan Connelly
A Chicagoan by birth and a New Yorker by habit, Michael has more than a decade of experience in digital publishing at leading titles in the U.S. and Asia. When he's not checking out Hong Kong's newest restaurants and bars or jet setting around the globe, you'll find him hanging out with his dog Buster and enjoying an Aperol Spritz.