Posted by
OffThePeak
12 yrs ago
HK & Singapore: Top Asian Safe Havens
Is Asia at the Center of the World (again) ?
==========================
China has always thought of itself as the center of the world - and for many centuries, it would have been hard to quarrel with that characterisation. But for a few hundred years, since 1600 or so, Europe and then the USA began to see itself as being "at the center."
But shifts happen, and we may be about to see another.
Here's my question: Will expat Americans and Europeans be flexible enough to "go with the flow" and take full advantage of business, social, and cultural opportunities, as one or more of thoe spheres increasingly center on Asia?
Here's an EXCERPT from the article that inspired this thread:
==Quote==
China is launching a new scheme to recruit the best and brightest talent from all races and nations on permanent visas. Call it a “red card.”
American expatriates represent just 1 percent of its population, far less than other developed societies. Geography is one significant reason. Americans have gotten used to believing they sit in the center of the world, but in fact the U.S. is the last major nation to complete the day (Brazil’s east coast is an hour ahead of New York). It is parochial, not to mention impractical, to believe that the rest of the world will wait for American instructions as it goes about its day. Instead, more and more traders and investors are moving to California so they can speak to Asian clients and partners at more reasonable hours.
To live in the future, you have to move to it. Singapore is not just a city-state; it is perhaps the world’s leading “info-state.” In the 20th century we spoke of garrison states and even market states, but in this age where geotechnology is the key driver of geoeconomics and geopolitics, it is the info-state that will have the upper hand. Info-states harness in knowledge and technology what they lack in size or military muscle. They thrive by providing not just security, but also connectedness to rapidly advancing markets and technologies.
==Close quote==
http://www.businessweek.com/articles/2012-05-24/why-eduardo-saverin-has-company-in-singapore
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I think you will have both kinds of expats, and the flexible ones will probably be more successful. Why is this under the hong kong property section?
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It is fine to move it, if Ed or others want to.
I think the attractiveness of Asia as a place to work and live, has a huge bearing on the property market. If the area goes on prospering, as The West falls into depression, even more people will want to come to Asia.
As an example of life getting better, I noticed a section in yesterday's SCMP talking about the booming wine trade. The week before, it was about the booming art market.
Maybe a business which ties into lifestyle changes in Asia might be worth considering. I am looking at such an opportunity now, and it has a property element to it.
I am happy to say more about it, but I felt that the more general story about the shifting of the political and financial centre of the World to Asia might be of greater interest here.
How do you think this shift will impact on property values? Have we already seen it in the fact that HK has some of the highest property prices in the world?
How would HK be effected by a property crash in London, which I think has been "in the cards" for sometime. Property problems are beginning to surround the UK - as prices have fallen in Ireland and are now sliding fast in Greece and Spain.
Until now, London has been seen as a Safe Haven. If London wobbles, will Hong Kong and Singapore become the new global safe havens?
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Ed
12 yrs ago
You could compare this to house insurance I guess... most people take it because if the 'if' situation if it happens would be catastrophic if you didn't prepare and your house burned down....
Let me see... is is more likely that your house will burn down - or the EU will bust up? I think b is by far the more likely event... most are insured for a.....
Life insurance might actually be a better analogy... you are not insuring against if... rather when...
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I would not give much to the press hype in HK, whose perspective is no more than that of a frog at the bottom of a well (to paraphrase a classic Chinese saying). Just look at the hyperboles real estate ads use.
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Walkup, your:
"But Central London doesn't wobble does it?"
No. Property markets always only rise. And trees grow to the sky.
London is due for a big fall, and I think that the Olympics and Safe Haven demand have merely delayed the inevitable correction. As you may know, a property correction has been underway since 2008 for the UK as a whole. Only London has been relatively unscathed.
My many friends in London (where I used to live) are amazed at the sort of prices that HK people will pay for new properties, which are advertised as being in "prime" locations. But if you call them "prime" in London, people will only laugh.
Things are different than in HK, where a huge new area has been created through landfill, and then given the best transport connections in the SAR.
I find it impossible to think of Kensington becoming a "backwater" of London. But parts of Mid-Levels which are now called prime, may not be prime in 10-20 years, unless their transport connections are improved. The new MTR extension beyond Sheung Wan may do that, but I think there may be some areas in ML that get left behind.
How many expats will flood into HK, seeking a Safe Haven? We will see. The more that do, the greater the chance that ML will retain its current status. If expats suddenly flood out instead (which now seems unlikely, but you never know), then parts of ML may fade instead.
For those who do invest in older buildings, especially those without elevators, the stakes in the Safe Haven bet may be rather large.
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Oh well,
My forecast on UK property prices are on record on another website. And I can tell you that my market calls since 2007 are not bad.
I have used the shares of UK Builders as a bellwether, and they have helped to call the turns. They are now suggesting a move lower, and if they break nearby support, then they might be forecasting a crash. They typically lead by 3-9 months, with a 6 months lead being a "best guess."
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ALTERNATIVES to HK and Singapore
It is no surprise that Singapore and Hong Kong are top destinations for expatriates – but young professionals without kids in tow looking to relocate may want to try Thailand instead.
According to the 2011 HSBC Expat Explorer Survey, Thailand ranks as the top destination in the world for expats if raising children does not factor into the equation – beating out other Southeast Asian countries like Malaysia (seventh) and Singapore (third) and other popular expatriate locations like Hong Kong and Switzerland.
Thailand excelled in particular when it came to the expatriate “experience,” ranked first out of 31 countries popular with foreign residents. According to the survey – which polled almost 3,400 expats from more than 100 countries on their experiences living and working overseas – it is easiest to find accommodation and to organize health care in the country, which also offers one of the best working environments in the world, a healthy work-life balance, and bigger, more attractive homes.
The Philippines, too, ranks highly as a destination for expats without children, and unsurprisingly is the easiest place in the world to hire a domestic helper
. . .
Hong Kong holds similar promise, with 73% of people surveyed saying it offers better career and income prospects than their home countries, and crucially higher salaries.
. . .
The study found overall that expatriate wealth is focused eastward, as countries like Switzerland and the United Kingdom lose their luster for career-minded professionals looking to relocate in search of better prospects and a higher quality of life. Only 39% of expatriates in the U.K., for example, said they believe the country to be strong, with just 7% saying the main benefit of their relocation was increased financial wealth.
+continues: http://blogs.wsj.com/searealtime/2012/05/30/thailand-top-for-expats-without-kids/
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There a show this weekend (SMART) at HKCEC and some Thai properties will be featured
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The problem with investing in Thai property is you are exposed to political instability and therefore currency instability. If you are buying to live then that is different. Thailand offers a great quality of life. Cheap and cheerful. You just have to look out for the adam's apple.
Definitely cities like hk and Singapore are considered safe havens. Yes, there is a lot of foreign investment from mainland china, but they are not the only foreign investors.
In addition to safe havens, I would add that hk and sing are also unofficial tax havens.
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Yes.
ANd you are also exposed to... flooding
It seems to be getting worse.
Chiang Mai is in the mountains, and may be better in some important respects
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I don't think we can take for granted that London property prices will go on rising.
Prime homes face 50% drop if euro fails
By Norma Cohen
The report, which was conducted on behalf of commercial property developer Development Securities, concludes that the factors that have driven up prices for prime central London properties relative to the rest of Britain swing into reverse in the event of a messy break-up of the euro.
The report concludes that since 1995, the single most important reason for the outperformance of prime central London properties has been flows of capital seeking a safe haven, both in the run-up to the launch of the euro, when uncertainty was great, and in the past few years as its future has come under question.
Two further factors responsible for driving up property prices have been relative sterling exchange rates, which have made British property cheap generally for non-UK investors, and the performance of the equities market, which is the key asset underpinning the wealth of high net worth individuals.
“A break-up of the euro would almost inevitably produce a significant appreciation of sterling and a collapse in global equity prices,” Fathom concluded, a development that would undermine the wealth of many of the high net worth individuals who have purchased central London homes.
+continues: http://www.ft.com/intl/cms/s/0/66da3a54-aa6b-11e1-899d-00144feabdc0.html#axzz1wT6CPD11
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I nearly bought near Docklands last year.
Had I done so, I would be looking to unload now, if I could bag and acceptable profit
London is clearly at/near a Major Peak IMHO
Before you rubbish my opinion, tell me what you think of the Timing of this old article, and I can tell you more about the background of how the writer came to his conclusions
http://www.financialsensearchive.com/fsu/editorials/2007/0705.html
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THIS COMMENT comes from a London-based Charterer Surveyor
(who posts on website I visit sometimes)
Little antidote
Over the last three weeks a growing number of estate agents and borrowers in prime London have been asking me if they consider the London market is about to correct. All are of the opinion that prices being achieved and have gone up to fast and to far. There are alot of nervous people out there. Those working in the City are the most pessimistic with job security their main concern, and so they should. No job no money to pay the mortgage.
-Unquote
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I believe You are far wrong!
The article was written July 2007 - The market peaked one month later, in the UK as a whole, and 2-3 months later for London.
He then called the exact bottom in Feb 2009, and forecast a rally of about 12 months - which is what the UK got before it started to fizzle out.
The big surprise factor was : Ultra-low interest rates, which have helped London more than the UK as a whole. And you can see how poorly the Hali-wide Index has been for the UK:
http://img690.imageshack.us/img690/6154/gpcuk02.png
Nearly all the themes in the article are still important, and IMHO it is many miles more useful than the unreadable h@rseh/te turned out by UK property agents, and other mainstream sources, which are useless weeks after they are written.
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??
I don't think so.
The article was published in July 2007, and anyone who sold then caught the Top. Here is the key EXCERPT:
"Meantime, the lower and middle tier of the property market is beginning to look tapped out. Hometrack announced in the past few days that the number of properties on offer in London has suddenly jumped by 10.9 percent in June, as compared with May. That is the biggest single month rise since January 2005, when the big jump in supply triggered a pause of more than six months in the property market. Another indicator that I particularly like is the price of traded Builder shares. Normally, this will lead the market by perhaps six months. In the USA, the builders gave a great early warning (almost a year ahead) that the US property market was peaking. They may be doing something similar now in the UK. The average builder stock peaked around the turn of the year, and is now down about 25-30%.
A similar drop was a good warning in the UK. This suggests that UK prices may be peaking out this summer, even in London, where the market had been so hot through the spring."
(End quote )
The subsequent falls are given here:
Index----- : At Peak (month) : drop#1 (month) /percent : latest (month) /percent
Hali-Wide : 192,490 (08/07) : 153,477 (02/09) - 20.3% : 162,657 (04/12) - 15.5%
RM- U.K. : 241,474 (08/07) : 213,570 (01/09) - 11.6% : 243,769 (05/12) +0.95%
RM- Lond.: 412,731 (11/07) : 386,653 (01/09) - 6.32% : 469,314 (05/12) +13.7%
ratio L/UK : 163.3% (08/07) : 181.0% (01/09) +10.84% : 192.5% (05/12) +17.9%
/source: http://tinyurl.com/HPC-data
========
I regard Hali-Wide (the average of Halifax and Nationwide) as more reliable, since the Rightmove figures are for Asking prices, and they bounce around a great deal.
As I said above, the main factor that has saved-the-day, preventing much lower house prices, was the UK quick move to Ultra-low interest rates at the tail end of 2008. Those very low rates allowed people to enjoy mortgage costs that were below Rents, provide a strong dis-incentive against selling. Rates are now already at or near the lowest level in history, so there is little more that the BofE can do to prevent the next crash - which I reckon may be developing, and will show up as big price drops after the Olympics- even in London.
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Was your comment posted on the wrong thread?
The one I thought I was posting on was started by me.
If you fail to realise that that any local market affords arbitrage opportunities with the broader market, measured by the Indices, then you may be too narrow-minded to be posting on this thread, which is ABOUT the concept of Safe Havens in a global world.
I am not as stupid as those Estate Agents, who talk about "location, location, location" as a way to bully their clients into paying too much for a property they are trying to move. There are always TRADEOFFS to be considered, and they are important to those who do not have unlimited means, and/or are not easily bullied by agents.
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That's the last thing you should look at - Start with the Big picture.
The cycles gonna kill you one day, Walk up.
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