photo: cloudfront.net

Will Hong Kong people buy Singapore homes?

Some readers ask me whether there will be more Hong Kong people buying Singapore homes, and whether this will raise local property prices and sales volumes.

Maybe they know I was from Hong Kong two decades ago. Or they have seen too many media reports on riots in Hong Kong.

Like many foreign countries, protests and strikes to Hong Kong people are like typhoons that often happen during the typhoon season.

If the people are unhappy about something, they don’t just rant at coffee shops or on social media. They join like-minded people to show their discontent openly in public. This is their human rights, freedom and democracy.

But as a property-obsessed country, Singaporeans can relate anything to properties.

Anyway, let me try to answer the question and share my personal views in this post.

It is not about properties. It is about insurance.

People leave their hometown either to run away from something bad at home (e.g. famine, poverty, war, unrest, crime, political differences, etc.), or to find something better overseas (e.g. living standard, career prospect, business opportunity, lifestyle choice, freedom, etc.).

It has nothing to do with properties.

Do you still remember why your ancestor migrated from their hometown to Singapore? When your great grandfather decided to come to Singapore, do you think he came here to buy a house?

Life is all about options. To live your life with dignity, you must make sure that you have options. This is called advanced planning – with a plan B or an insurance in place to minimize possible damages when the undesirable happens.

This is cruel but true: If you have money and leave your country in a plane, you are called an investor immigrant. If you don’t have money and leave your country in a boat, you are called a political refugee.

To ensure that you can take the better option, you must be eligible to be an investor immigrant. In other words, you use your money to buy permanent residence (PR) in a foreign country.

Hong Kong people are not buying foreign properties. They are buying foreign insurance policies in case anything happens. And they are comparing insurance products from different insurance companies.

In Singapore, to get PR approval through the Global Investor Program (GIP), you must invest at least S$2.5 million in a new or existing business; or invest at least S$2.5 million in a GIP-approved fund that invests in Singapore-based companies.

There is a recent Hong Kong news article comparing the cost of investor immigration for countries providing the option. Apparently, Singapore is the most expensive of all.

It is not about properties. It is about permanent residence.

What about getting a job first and apply for PR later?

Under public pressure, the Singapore government is very strict in granting PR in recent years. Foreigners may work as senior executives for years but still can’t get their PR.

The PR quota will not be relaxed any time soon, at least not before the next election.

People with pink and blue ICs enjoy all the priorities and subsidies in housing, healthcare, education, etc. They can buy HDB flats. But foreigners can only buy private properties. The moment they buy, they are immediately asked to pay 20 percent more Additional Buyer Stamp Duty (ABSD).

Some people don’t understand that buying a home and calling it home are two different things.

And there is a big difference between buying a foreign property and migrating to a foreign country.

When you buy an overseas property, you use it as a holiday home or an investment. You want to invest, that’s why you buy a property.

When you migrate overseas, you have the intention to live there. That’s why you buy a home. Property purchase is a means. Migration is an end. Spending money is a means. Getting PR is an end.

Without PR, you don’t enjoy social benefits.

The keyword here is “benefits”. Humans are motivated by incentives. If you give out goodies, people all come and take. If you don’t have goodies, who will come?

Why is PR so important? It is not only the entitlement to all the social welfare of that country. It is also the right of abode associated with permanent residency. With right of abode, you can live, work, enter and leave the country freely without restrictions.

Hong Kong people are not buying investment. They are buying insurance.

Hong Kong people are not buying residences. They are buying permanent residence.

Why Singapore is not the country of choice

After the June 4th Incident in 1989, many Hong Kong people who had the means to migrate were leaving for the UK, the US, Canada and Australia (like Singaporeans, they also think ang mohs’ places are better).

To compete with these countries, the Singapore migration requirements were much lower to attract those who were ineligible to migrate to western countries.

The Singapore government was aggressive in promoting migration to Singapore. There was a migrate-to-Singapore TV commercial aired several times every evening, with a brainwashing jungle “It will be a heaven there” sung by a popular Hong Kong singer.

That was the commercial broadcasted in 1991. A new one in 1996 targeted young families who wanted to migrate for their next generation.

In 1997, I joined others to buy that Singapore “insurance” too. I remember paying an application fee that cost a few hundred Singapore dollars and soon got my Approval-In-Principal for PR. A year later I found a job in Singapore. The moment I touched down, I was officially a Singapore PR. How lucky!

Many Hong Kong people returned to Hong Kong after they got their PR or citizenship in foreign countries – all the necessary foreign insurance coverage.

Emigration in Hong Kong has been on the rise again for the last few years. The popular destinations for Hong Kong people are still Canada and Australia. The new ones include Taiwan, Malaysia and Thailand, but not Singapore.

Thanks to the foreign developers, property agencies and Hong Kong media that actively promote the beautiful homes, good food and relaxing lifestyle in these Asian countries.

And blame it on how the international and Hong Kong media portray Singapore. Yes, they may be biased at times. But which media isn’t?

I think most people are more comfortable moving to a political and media environment similar to their hometown. When you have a different view, you are free to voice it out. Whether the situation will improve or not it doesn’t matter.

If this is an important criterion, Taiwan takes priority, followed closely by Malaysia and Thailand. But in terms of language, weather, Chinese culture and warm hospitality, Taiwan is the obvious country of choice.

On July 31, Taiwan’s Minister of the Interior Hsu Kuo-yung had a new post on his facebook page that reads,

“According to the statistics of National Immigration Agency, immigration applications and permanent residence for Hong Kong people have increased 30 percent and 57 percent respectively year-to-year.

China’s one-country two-systems is a lie. We must try our best to protect our democracy, freedom and lifestyle.

Our living environment, public transportation, food, climate, space and affordability are reasons why Hong Kong people want to live in Taiwan. Taiwan encourage senior professionals and middle-level technicians to come to Taiwan. We will be sharing new plans soon to support their relocation to Taipei, Taichung and Tainan.”

Sounds familiar?

You may say this is politics. Don’t forget. When people are giving you an offer, at least you still have value to them.

It is not easy to uproot yourself

A 2016 survey by NUS Institute of Policy Studies showed that 18.3 percent of 19 to 30-year-old Singaporeans had thought about emigrating.

Emigrating overseas is rarer and harder than you think. Being unhappy about your country is one thing. Leaving it altogether to start a new life in a foreign country is another thing.

You may keep ranting about your job. But you will still be staying in the same company for the rest of your career life.

The older you are, the more things you have, the harder to move. There are simply too many things you need to consider and settle.

What about your significant half? What about your children? What about your aging parents? What about your friends and connections? What about your job and your business? What about your home and mortgage?

What happen if you fall sick? What happen if you are fired? What happen if you are bullied and discriminated against?

You are not going for a long vacation, an overseas study, or an overseas posting that you know exactly when you can return. You are giving up everything, moving to an unfamiliar country and starting from scratch. You deal with all the problems alone and try your best to hold on. Because if you quit, you need to go back home and start all over again.

Only people who have left their hometown before can understand all the hardships and loneliness of staying abroad; and the patience and hard work it takes to survive in a foreign country.

What properties will Hong Kong people buy?

Hong Kong people who are really well-to-do would have already bought foreign homes in many countries. They also have multiple foreign passports they got 20 to 30 years ago. In case anything happens, they can leave anytime. The question is when and where.

But the rich are the privilege class who are enjoying all the good things in Hong Kong. They don’t have to go.

What about those who have some money and haven’t bought their “overseas insurance” yet? Or those who really like the spacious living and international schools in Singapore?

If they don’t mind paying 20 percent more ABSD, they are not buying HDB flats, mass market condos or newly-launched projects that have years to TOP. They are looking at luxury properties in prime districts. Because they look affordable with good value-for-money compared to properties in Hong Kong.

How many properties will Hong Kong people buy?

For this year, foreign buyers bought 173 units and 253 units in the 1st quarter and 2nd quarter respectively, which is 5 to 6 percent out of the total number of transactions. Of course, our “foreign buyers” also include foreigners staying in Singapore waiting for their PR.

Say, Hong Kong buyers add 50 percent more business to property agents in the next quarter. So we sell 380 units per quarter or 127 units per month to foreign buyers.

Is that good enough for 29,146 property agents in Singapore?

Coming back to the question: Are there many Hong Kong homebuyers interested to buy Singapore homes because of recent riots?

If property agencies believe, there are. If you don’t believe, there aren’t.

It is similar to the Chinese doing bai-bai and burning offerings to the ghosts during the Ghost Month. Are there really ghosts? If you believe, there are ghosts. If you don’t believe, there are no ghosts.