Friday, December 24, 2010

Hong Kong, China buyers investing in Manhattan

I'm currently writing from Midlevels in Hong Kong, enjoying the cool winter weather on Christmas day.  Some property notes when comparing Hong Kong/China vs New York.  

- South China Morning Post reported that Beijing, China appreciated the most last year, 40%.  Hong Kong 17%, Manhattan 10%, London 20%.

- Hong Kong prices are at USD 2000 psf, much more expensive than Manhattan at USD 1500 psf.  When one factors in the large gross vs net square footage difference, Hong Kong property is even more expensive than USD 2000 psf. 

- Key reasons for Asians wanting to buy in Manhattan include diversification into a stable prime market and getting a property where their children are studying.  Property ownership is a top priority for Asians, especialy Chinese.  It's a cultural thing.  Compared to London, Manhattan is a deal.  Manhattan is also a stronger economy and more desirable place for global talent. 

- Everyone knows property prices in Hong Kong and China are overinflatded.
Yields in Hong Kong are much lower than Manhattan, expected because prices are jacked up while rents remain the same.  Gross yields in Hong Kong are half of that in Manhattan.

I visit Hong Kong every year.  Compared to 5 years ago, a huge difference is Mandarin Chinese is now a must know.  I bet all the sales associates at Chanel and Ferragamo speak Mandarin.  There was a line at the Chanel store in Pacific Place!  Hong Kong is the most entrepreneurial and business focused city in the world.  Almost anyone can speak confidently about what makes a business work, ROI, yields etc. 

But i still prefer living in New York.  More space and 10X better air quality.

Visit us at Castle Avenue Partners - Manhattan investment property
Foreign buyer guide

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