Saturday , May 25 2019

Realtors investigated for Hong Kong overseas property sales

General view of land development at the Kai Tak area, which is the location of city's former airport, in Hong Kong, China March 14, 2017. Picture taken March 14, 2017. REUTERS/Bobby Yip



Hong Kong’s securities regulator is investigating whether realtors selling overseas properties are illegally marketing investment plans, according to a lawmaker helping investors who lost money on such deals. Buyers argued that developments promoting guaranteed rental income are so-called collective investment schemes, which need approval from the Securities and Futures Commission, said James To Kun-sun, a member of the city’s legislature. Individuals who lost money on at least 15 uncompleted UK developments have complained, said To, who met with the agency on March 7.
In a property-obsessed city ranked among the world’s priciest for home purchases, investors have taken advantage of a currency tied to a strong dollar and low borrowing rates to snap up overseas offerings, while developers tout incentives such as fixed returns to lure Asian money. But there can be misunderstanding among people not familiar with Hong Kong securities law about what approval is needed, said Rolfe Hayden, a partner at law firm Simmons & Simmons LLP.
“It is not so surprising that real estate agencies in Hong Kong would not see any difference between selling a flat in Wan Chai and a resort in Thailand that is centrally managed and offers a guaranteed return,” he said, referring to a district in Hong Kong.
To said after his meeting with the regulator that the agency will soon make an announcement on the cases. Ernest Kong, an SFC spokesman, declined to comment. Existing home prices in the city reached an all-time high in the week ended March 5, according to the Centaline Property Centa-City Leading Index, which tracks sales of secondary homes. It’s not just the SFC that is looking into the issue. From 2014 to 2017, 276 people filed complaints with the police after they suspected they were deceived while investing in overseas property, a police spokeswoman said in an emailed response to queries. The cases are being investigated by the Commercial Crime Bureau and no arrests have been made, she said.
Income guarantees help woo buyers in Hong Kong, many of whom spend their weekends visiting hotel ballrooms filled with salespeople and models of yet-to-be built properties. The UK, Canada, and Australia are among the most popular choices for Hong Kong investors buying overseas, according to consultancy Savills Plc, which said it doesn’t sell income-guaranteed properties. The regulator did not say which companies it was investigating, To said. Complaints made to the SFC include at least one about a unit of Century 21 Hong Kong Ltd., a franchisee of US-based Century 21 Real Estate LLC, according to investors who asked not to be named because the matter isn’t public. They said they bought UK student accommodation with a guaranteed six percent return through Century 21 after seeing newspaper advertisements promoting the project. Deposits were lost after the development went into liquidation, the investors said.

About Admin

Check Also

New air accident investigation lab opens in Abu Dhabi

Abu Dhabi / WAM Saif Mohammed Al Suwaidi, Director-General of General Civil Aviation Authority (GCAA), ...

Leave a Reply

Your email address will not be published. Required fields are marked *