In recent years, the boom of Chinese overseas property purchases has risen. I also often encounter some friends’ consultation here. In the past few years, many people asked me about the forest city next to Singapore. I was basically dissuaded by me. I believe they are all now. Thank me very much. Recently, a local tyrant asked whether Singapore’s school district housing should be bought, and I was decisively persuaded to leave. Let me just sort out this topic and talk about my understanding of overseas property purchases.
1. Identity disadvantage
Many countries have the advantage of homeowners buying houses. For example, landed houses in many countries are only allowed to be purchased by homeowners. For example, the property rights of some countries are different for locals and foreigners. Another example is that foreigners and locals have different taxes and fees when buying houses.
As a foreigner, buying a house in many countries actually suffers a lot, that is, from the moment you buy a house, you have already lost a lot more than the locals.
And many of these policies, I can honestly say, are aimed at Chinese buyers, because only Chinese people like to buy houses too much.
Take Singapore as an example, because I know this well. Many people say why Singapore houses are so expensive? Government flats are not sold to you, landed houses are not sold to you, and condominiums are not sold to you. Why are the houses so expensive? Then the foreigner stamp duty is suddenly 20%. What do you want?
You buy a 100-square-meter high-rise two-bedroom house on Orchard Road, Singapore. For the same price, locals can buy a five-bedroom townhouse with three floors above ground plus a basement and a private garage only two or three kilometers away from Orchard Road. , It is still a traditional wealthy area with an extremely good environment. Who cares about your high-level two-bedroom apartment? What are you looking for?
2. Information asymmetry
Regarding the value of real estate investment, value preservation rate, local security, surrounding environment, and supporting facilities, many will only be felt if you live there for a long time. Just look at some beautiful PPT or occasionally follow the agent to take a look at it. It may be too much You don't know the problem.
I still take Singapore, which I am familiar with, as an example. The intermediary introduces real estate to Chinese people, basically in the 9th, 10th, 11th, and 4th districts. (Singapore has more than 20 postal areas) Let me tell you a huge and simple unspoken rule. The agency will give priority to recommending properties with high commissions. A bunch of Chinese told me that Singapore’s houses are more expensive and expensive. In fact, Singapore’s area is not large. You can see where the locals live. If you leave these areas a little bit, the house prices will be much more approachable, but the intermediary will not I recommend those to you. Many Chinese people dare to buy a house without knowing which properties are cost-effective in Singapore.
Furthermore, second-hand houses in Singapore are much cheaper than new houses. A 30% price difference in the same lot is normal, and second-hand houses in Singapore are well maintained, both inside and outside. Many old houses in developed countries are very well maintained. But the intermediary will try to promote you to buy a new house, because their commission for the new house is high.
Let me explain why new houses in Singapore are much more expensive than second-hand houses. New houses in Singapore are all well-renovated. Kitchens, bathrooms, floors, air conditioners, and wardrobes are all equipped. Some are equipped with refrigerators and washing machines. They are all very good brands. , By no means a bargain. (Even HDB flats are well decorated.) Generally speaking, all you need is to buy lights and curtains. You don't need to paint the walls. Install lights and curtains, buy a bed and a sofa, and then move in. Moreover, there is another trick here. Many Chinese people come here silly and don’t know. The intermediary commission here is very high. You can actually mention the conditions when you place an order. For example, if the developer does not send a refrigerator, you let the intermediary send you. A Samsung double-door 600 liters, he will surely send you a 65-inch large-screen color TV, boldly ask, no problem. So if you buy a new house and move in, you can really save money. Not only do you need to spend money on decoration, you don’t have to spend money on electrical appliances.
However, many people in second-hand houses will re-decorate or replace some furniture and electrical appliances. Singapore’s labor is more expensive, so the market price of second-hand houses is naturally not competitive. This is different from China. Many new houses in China are pure blanks. Your decoration is very annoying and tiring. Second-hand houses may be treated a little bit and repainted, so this perception is completely different.
For a long time, I will tell you a very crucial piece of information, that is, many times the intermediary tells you that housing prices in a certain area have been rising, a few points per year. I will tell you the truth, the price of regional housing prices is rising, which does not mean you bought it. The house will rise, can you understand it? Going back to the logic above, the newly opened price is indeed more expensive than the house you bought that year, but yours is a second-hand house. Sorry, it would be nice to maintain the original price! For example, if you bought a house in 2015, you read the news and the house price has risen in 2018. Well, the house price of the newly opened market in 2018 has risen than your house price of the year, but your house, sorry, most of it is still on the same spot, or even worse .
Rising regional house prices does not mean that your house prices will rise! The cost of depreciation is amazing! ! !
Information Asymmetry Let me talk about the story of "Beside Singapore" back then. In Country Garden Forest City, a bunch of people asked me all kinds of questions, but they were fooled. That place is not next to each other, but you can see Singapore, what to see, look at the large chimneys of the chemical plant on Jurong Island in Singapore, and ask you whether you are happy or not. The Singapore chemical plant is indeed very close to the urban area, and it is large in scale, but the government has fully considered the impact of climate and monsoon when designing it. The emissions will basically not affect the urban area of Singapore, so what will it affect?
And that place, except for Chinese people who will buy it, no local people will buy it. The local people buy the villa at the same price, so it is so rare to squeeze it with you, and it is a mess. In addition, according to the design and planning, it will be a big construction site for at least 20 years. Who is so addicted to like living in a big construction site.
Many people compare Singapore and Hong Kong, so they think that Johor Bahru, Malaysia can be compared to Shenzhen. Let alone Johor Bahru and Shenzhen, there is a difference of tens of thousands of miles. Even if there is a contrast, look at the map. Where is the urban area of Johor Bahru? Where are the commercial facilities in Johor Bahru. I took a 10,000 step back and said, you really want to invest in Johor Bahru. R & F Princess Cove is at least reliable. At any rate, the location is still guaranteed. You can even hike to Singapore. Of course, this is not investment advice.
In addition, in Singapore, school district houses have a little value, but they are not as valuable as in China. Some real estates will take the school district as their case, but I have encountered many local agencies and even can’t figure out the school district’s housing. You know how limited the value is. . Freehold property rights have a little value, but not so much value. Ocean view room, sorry, Singapore is surrounded by the sea, so the ocean view room is not so valuable. The northern part of Singapore can see the sea, and the single-family villa next to the beach park is 2 million SGD. It's really that sentence, facing the sea with spring flowers blooming. But they are not rare. There is also the issue of orientation. In the equatorial region, there is no difference between facing south and facing north. Many Chinese still look at their houses from the northern hemisphere.
3. Dilemma
This is the biggest problem. Buying a new house feels good, but when you want to realize your assets, you will find that you want to cry without tears.
Let me tell you the real situation of Singapore's real estate. Apartments with more than 2 million SGD are very difficult to sell in the secondary market!
There are not many buyers with more than S$2 million, and local buyers, who have a purchasing power of more than S$2 million, will choose to buy landed houses. How many buyers are saved?
Then you say, it's not right, there are foreign players.
Looking up, the information is asymmetrical. The intermediary only pushes new houses to foreigners, and the commission for second-hand houses is low. Who will push it for you?
You see, the Chinese people who buy houses are asking about new houses. Who asks about second-hand houses? Only those who live here for permanent residence will ask about second-hand houses. The question is, who would buy such expensive houses? The apartment.
I'm telling the truth. I know some Chinese people who invest in buying houses here, but they are short of funds. When cashing out, it is very common to lose 500,000 SGD and get out of the market. They are all in the so-called luxury residential areas. This is the case when the epidemic did not appear. The situation is very common. In the early years, those Chinese tycoons who bought villas in Sentosa were really cut off. What is the concept that house prices have fallen by more than 40%, really!
The sea view apartment that my own family bought a few years ago was bought by a Chinese investor. His purchase price in 2013 was S$1.7 million. Do you know the price it sold to me in 2016? 1.43 million Singapore dollars, these are available on the official website of the Singapore government. The net price has lost S$270,000. What if the taxes on buying and selling are included? That is, the loss of 450,000 SGD and the loss of bank interest has not been calculated. Taking into account the rental income of the other party, I am optimistic that the other party can recover 100,000 + SGD from the rental. The overall loss of more than 300,000 SGD is ironclad. of. After losing more than S$300,000 in three years, the investor bought a lesson in Singapore. And at that time, it took us more than two months from viewing the house to placing the order. The net loss was more than S$300,000, and the sea-view apartment with less than S$1.5 million was significantly lower than the assessed price (when we applied for the loan, the bank Everyone asked if it was sold to you by your relatives, the price was significantly lower than the bank’s assessment price at that time), and it was listed on the real estate website for at least two months and no one was willing to buy it.
This situation is not uncommon in Singapore. It is very common for properties that are much lower than the assessed price to be sold at auction houses four or five times and cannot be sold in half a year. Advertisements appear every day, that is, no one buys them, but the intermediary usually won't tell you this.
I recently saw several similar listings. Ten years ago, the landlord bought it for S$3.4 million. What is the landlord’s selling price now? It was 2.7 million Singapore dollars, and it could not be sold after hanging up for several months. Still freehold!
4. Maintenance cost
Maintenance costs are not just about taxes, property fees, etc. If you want to rent out, you need to have a lot of communication, such as bargaining with tenants, damage to and renovation of facilities, and possible various disputes.
Moreover, different countries have different legal provisions. You may violate the law if you don't pay attention to it. Yes, there are many possible violations of the law in renting a house. In many countries, you should remember that the state machinery is for taxpayers. This is also the blind spot of many Chinese thinking. Some people in the country will think that I have money and I have invested in your country. Your government should not protect my rights and should not please me in various ways. Sorry, the voters of many countries want to please the government.
Here is more to mention the so-called rent return, the expectation of rent return. A lot of publicity seems very good, but there are too many optimistic expectations. I take Singapore as an example. The property tax for owner-occupied houses is really low, but for rented houses, Real estate tax is not low. About 12% of your rent return is required to pay real estate tax. In addition, you are responsible for the property fees, which account for about 10% of the rent. If the facilities in your house are damaged by non-man-made damage, you will need to pay half of the money for repairs. Coupled with the empty rent rate and the commission of the real estate agent, your real rent return, which can have 60% of the expected return of the promotion, is already very good, and the promotion is very kind. And after a period of time, if you want to maintain a good rental price, you must also refurbish and repurchase the necessary furniture and electrical appliances, all at a cost!
Many people think that it is long-term. Will the rent rise, and the house price will rise again? Take Singapore as an example. I came to Singapore in 2013. In the past 7 years, most of the time, house prices and rents have both fallen. From 2013 to 2017, 14 quarters Streak. After 2017, it bottomed out and rebounded. It rebounded a little bit every year before recovering a little decline. The 2020 epidemic has fallen again.
By the way, there are so-called chartered houses in many areas, with an annual return of more than 6%. After renting for a few years, I will tell you that it is actually selling you a 20%-30% increase in the house price, and then renting you for 3-5 years. Return this part to you. Many of them cannot be rented out at all, or the market rent is far lower than the promise of charter rent. It's very simple. You can calculate the local airbnb price, the price of the local four-star brand hotel chain, and the local rent level. You can search through some local websites. Don't do your homework. Listen to the agent and believe it.
5. Thinking blind zone
Many Chinese overseas buyers still use the Chinese way of thinking and regard the real estate phenomenon with Chinese characteristics as a global model.
I thought that housing prices would keep rising.
I thought it could be easily sold at the market price.
Thought the school district room was very valuable.
I thought that the rich locals would also like the luxury house I bought.
I think the rental return can rise steadily.
I thought I could immigrate by buying a house.
Also, the so-called investment in real estate to obtain identity, this kind, I mean it. It is also a pit.
Many people can’t distinguish between residence rights and nationality. Residency rights are actually different. There are some local people’s benefits, educational resources, and work rights, and some just allow you to live. The residency rights in many European countries are in fact only allowed for permanent residence. There are no other rights. For example, Greece, which is about to go bankrupt, is not difficult to get a five-year Schengen visa. Why do you want that tasteless? Silly, he spent money to buy a house, and found that apart from living in the local area, there is no welfare and no treatment for locals. What is the picture?
There are also people who can spend money to buy a house and get a passport, Antigua and Barbuda. If you are ready to run, you can choose.
Indeed, some countries in Europe can also spend money to buy a house in exchange for passports, such as Cyprus. Some intermediaries claim to be able to enter the EU in the future, haha, haha. Why do these countries allow to buy a house and exchange passports? The foreign exchange reserves have collapsed, and they cannot be carried anymore. They need to be carried by the Pan Xia. When I look around the world, Chinese people have a lot of foolish money. I ask you, would you be willing to accept such a crisis country if you are the president of the European Union? A Greece is not enough for the EU. The British Empire is all set up, and you still expect how much blood can be squeezed from Germany to raise these things.
6. Regional risk
Of course, frankly speaking, there are still some people who have gained huge value in buying properties overseas, and they are mainly concentrated in some fast-developing countries and regions, such as some tourist cities in Thailand, such as Ho Chi Minh City, Vietnam, such as early gold panning in Cambodia or the Philippines. Some of them.
Indeed, if some economies coincide with a rapid development cycle, coupled with the process of urbanization, there is such a room for rapid growth, but you must assess the risks here.
What is this like? Similar to the p2p financial management in previous years, you may be able to get good returns, but there is also the risk of collapse. You can't just see the benefits.
Why do you say that.
First, the stability of small economies is very poor and is greatly affected by the international situation and policies. Often when a law comes down, housing prices fluctuate by tens of percent.
Second, the political system of many small countries is unstable and changes are made every day. Once the government is changed, many of your previous rights and interests will be deprived of or even directly confiscated by the new government.
Third, the issue of currency stability. In recent years, don’t talk about small countries. Look at Russia and Turkey. These are relatively powerful countries. When the currency crashes, it crashes. The Australian dollar did not crash in the first few months. .
Your house price may have risen in the local currency, but according to the international exchange rate, it’s hard to tell.
Fourthly, the catcher is usually his own. For example, in a typical Cambodia, only the Chinese will pick up the game? It is a game of drumming and spreading flowers. Many gray industries will be cleaned up sooner or later. Once cleaned up, the Chinese will no longer go, and the locals will not take over.
In fact, Thailand also has similar risks. You are not right. There are many Europeans and Americans in Thailand. Europeans and Americans only rent but not buy. If the year is good, the rental return may be justified. But the Thai government is also unstable, and some policies are inexplicable. For example, the establishment of an industrial park in the south of Bangkok has caused Bangkok's air pollution index to rise sharply. Various risks in the tourism industry exist at any time, and the local consumption capacity cannot support housing prices.
China’s decades of stable and rapid growth are a special case on a global scale, but many people in the country regard this as a universal truth.
Some brief summary
It is almost impossible for housing prices in developed countries to skyrocket, and once there are signs of excessive growth, the government will curb real estate in order to vote. Typical examples such as Australia, Canada, and Singapore have introduced some provisions to curb Chinese real estate speculation.
There are indeed opportunities for skyrocketing in developing countries, but at the same time there are various risks. When skyrocketing, your property seems to increase rapidly, but it may not be able to effectively realize it. When it plummets, you will definitely not be able to run away.
Most of the hot spots for overseas home purchases by Chinese people are basically only Chinese or overseas Chinese. If you take this into consideration, locals will basically not take your offer.
Then you said that it is not possible to buy a property overseas? Under what circumstances, let me give a few examples.
1. If you live overseas, if you want to have a better quality of life and not bad for money, you can be casual. If you live by yourself, you can buy it if you like it.
2. Investment by big players, such as taking the whole land for development and doing projects by yourself, this is always possible. But it also needs to have enough local resources and research, don't throw it into your own hands.
3. There are many local friends, deep friendship, complete information, entrust daily processing with peace of mind, and appropriate investment.
Let me just say one thing. For example, in Singapore, foreigners can buy properties, which properties are better for renting and for renting. Of course, the rent-to-sale ratio of HDB flats is definitely better than that of apartments, but foreigners don't expect it. Let me tell you that among the apartment properties that foreigners can buy, the small apartment in Geylang has the best rent-to-sale ratio. You see, the average real estate agency will not tell you this. They will take the Chinese to Orchard Road and say that the rental returns there are high.
Why does Geylang's small apartment have the best rent-to-sale ratio? The first is that the unit price is low enough, because it is a red light district and many locals are not keen to buy a house there. It is a low price. The second is that the traffic is good enough, only four or five stations away from the downtown subway, and it takes less than 15 minutes to get to the CBD by subway. So many people with work visas rent houses there. The third is that Geylang has a lot of dining and delicacies, and there are also many supermarkets, and the prices are cheap. It is also especially suitable for people who work in slopes with work visas. The fourth is that the apartment is small enough, with 50 square meters of two-bedroom units. There are basically no such small two-bedroom units in other places in Singapore. This kind of very good rent can be rented to a family of three, or it can be split and rented to two tenants. Because the transportation and catering facilities are particularly good, the rent will not be low.
But without the care of local friends, there are potential risks here. For example, if tenants engage in illegal prostitution, many apartments in Geylang have such things. Once arrested, the landlord will be responsible; for example, some tenants are second landlords and excessive It is also illegal to split rooms to introduce too many tenants, and things like this are quite common in Geylang. It will be very troublesome if the police come to the door if complained by neighbors.
4. Hedging risks and diversifying investment. There is too much money, I don’t want to put it all in one place. I hope to hedge the risk. It’s not impossible. Again, pay attention to liquidity. In fact, investing in the stocks of leading local developers is more appropriate than investing in real estate. If the house price really rises, you invest The stock will also rise, and the key is good liquidity, which can be realized at any time.
5. Be ready to run away at any time and buy a third-country passport. You can buy a third-country passport without buying a house. Buying a house just makes you feel "worth". Besides, buying a third-country passport will be able to run away. Isn’t it an underestimation of the control capabilities of the state machinery? Well, there are still people who want to avoid taxes on overseas assets. How can I say that it is difficult to open a bank account in a reliable country with a passport of a small country. Bank risk control is also afraid of this.
Finally, I don’t sell houses, and I don’t recommend real estate to everyone. I just want to say that local tyrants invest overseas if they can afford it. The middle class suggests not to touch this stuff. You say you want to do global asset allocation, you London In the stock market, the U.S. stock market just buys a few leading stocks in the industry and keeps them, and they can be used with money. It is not necessary to buy a house to allocate assets.
Nowadays, many middle class are yearning to buy properties overseas. They feel that there are price depressions everywhere, and depressions are indeed depressions. Be careful to bury yourself in them. Don't play the game of drumming and passing flowers, don't always feel that you are not the last stick.
Finally, show two pictures
This house is not beautiful or not, let me tell you, it's not worth much, and no investment value. This is a sea view apartment in a tourist city in Malaysia. It looks beautiful, but don't take it too seriously.