Hang Kei Ho’s work on ca­pi­tal flow from Hong Kong to the UK’s housing mar­ket wins an award

13.2.2020
The peer-reviewed article authored by Dr Hang Kei Ho from the University of Helsinki and Prof Rowland Atkinson from the University of Sheffield entitled “Looking for big ‘fry’: The motives and methods of middle-class international property investors” has won the Academy of Hong Kong Studies 2018/2019 Outstanding Paper Award.

Dr Hang Kei Ho’s research debunks the myth of a housing shortage in London as solely caused by the global super-rich buying prime (worth between £2 million and £5 million) and super-prime residential properties (worth more than £5 million) in affluent areas of London such as Mayfair and Knightsbridge.

While this is true to a certain extent, Dr Hang Kei Ho argues that Hong Kong buyers are the key investors in London’s core properties (worth less than £2 million).

“It is important to acknowledge that the prime and super-prime markets operate differently when compared to the core market as high-end properties tend to be bought and sold through companies registered in tax havens, such as the British Virgin Islands, as opposed to by individuals,” Ho states.

Seven articles were nominated for the Outstanding Paper Award from a compilation of 284 peer-reviewed international journal articles indexed under the Web of Science. The nominations were dispersed by the conference Review Panel and the Faculty Deans of all eight government-funded universities in Hong Kong.

In­ves­tors see­king fi­nancial secu­ri­ty and geo­po­li­tical cer­tain­ty

Dr Ho’s research shows two key factors dominate the decision-making process of Hong Kong investors keen on buying properties in the UK—a drive to achieve long term financial security, and a geopolitical backup to assist in securing emigration rights as a hedge against potential future risks instigated by mainland China.

Hong Kong lacks a pension plan significant enough to offset future expenses for the majority of its population as well as a robust banking system that encourages savings.

 “Interest rates offered by banks on savings accounts in Hong Kong continue to be near zero, forcing investors to seek out low-risk high yield foreign properties in search of regular rental income and a greater return on investment,” Ho says.

Empirical evidence also shows that Hongkongers began acquiring an increase of overseas properties in the late 1980s as the sovereignty transfer of Hong Kong from Britain to China was in its infancy. Since then, spikes in offshore property acquisition by Hong Kong residents has closely followed geopolitical uncertainties: with most recent spikes occurring during the 2014 Occupy Central movement, and the continuing saga of the 2019 Hong Kong protests.

"These purchases indicate a class of investors uncomfortable with the levels of risks found in the Hong Kong market, and allow purchasers a way to hedge against them by securing emigration and expatriate rights.

Dr Ho’s research also suggests, that although political and economic uncertainties have been generated by Brexit, many Hong Kong investors continue to find London, as well as other parts of the UK, a valuable investment.

 “For those with the financial means, Hong Kong residents continue to send their children to British boarding schools to be educated in the hope of securing a better future for the next generation,” Ho says.

Dr Ho presented his findings and accepted the award at the Hong Kong Studies Annual Conference in Hong Kong in December, 2019.

Open access article available: https://journals.sagepub.com/doi/full/10.1177/0042098017702826

 

Further information:

Hang Kei Ho
Tel: +358 294123937
Email: hang.kei.ho@helsinki.fi