In the latest HSBC Expat Explorer report published on Wednesday, September 21, 2016, many expatriates who have invested in property abroad share their views regarding real estate investment.
Buying a property abroad can be a good investment for expatriates living abroad. In fact, many have acquired a property either in their host country or in their home country, or both, according to the latest HSBC Expat Explorer report published on Wednesday, September 21, 2016.
While 41% of respondents say they are owners in their respective home countries, 32% of them are delighted to have been able to buy property abroad. Although samples are likely to vary from one region to another, globally, two thirds of expatriates are owners either abroad or in their home country. Moreover, 1 in 10 expats state they own property both abroad and in their home country.
According to many of them, especially for those living in Saudi Arabia, Qatar, Oman, the United Arab Emirates or Singapore, moving abroad has allowed them to speed up their plans to buy property, be it the first or the second property.
Investing in real estate in the Middle East
Although it is quite unlikely for expatriates to buy property in the Middle East, usually due to the duration of their stay, the United Arab Emirates seem to have been attracting more real estate investments during recent years. Indeed, 12% of respondents are owners compared to 32% globally. In fact, the UAE provides several benefits to foreign nationals wishing looking forward to buy property, including the property visa.
Dubai seems to be the dream land for expatriates looking forward to invest in real estate, under certain conditions. Moreover, the UAE provides a light tax framework given that property tax is non-existent. As regards property prices, those offered in Dubai and Abu Dhabi are quite lower than in other big cities such as London, for example. As income tax does not apply, expatriates are also able to repatriate their earnings so as to buy property when they go back to their home country.
At the same time, expatriates living in Hong Kong and Singapore believe that higher wages and the ability to make savings has allowed them to buy property in their home country.
Canada, France: an attractive investment framework
Elsewhere in the world, buying property is believed to be a good investment. Nearly three-quarter of respondents in Canada, France and New Zealand say they have bought property in their host country. This can be explained by the fact most of them have lived in there for more than five years, which is the case of 80% of expats in Canada, 73% of those living in New Zealand and 67% of those living in France.
Canada thus seems to be one of the best destinations in the world to buy property. Tax treaties between Canada and some countries have allowed foreign nationals to avoid double taxation. Moreover, it is possible for expatriates in Canada to take a loan at attractive rates to finance their purchase provided they are in possession of at least 35% of the total amount to be invested. In general, the Canadian real estate market provides affordable property for those who wish to settle in the long run.
In Europe, France seems to be the most attractive country for expatriates looking forward to buy property. Over two thirds of respondents say they became owners expatriates in France compared to the global average of 32%. Note that almost half of them reveal they have sold their property to their home country so as to buy property in France. In fact, the French real estate market has been booming during past years with a growing demand for new homes built according to French regulations in terms of construction and energy saving. Furthermore, property tax is lower than in other countries such as the United States, for example, while agency fees are nonexistent.
A growing market
New Zealand also provides many benefits as witnessed by 67% of respondents expatriates, most of whom have been living there for more than 5 years. Indeed, New Zealand offers the most competitive real estate prices in the Pacific region. Other advantages are a safe framework for real estate investment, absence of capital gains tax, as well as lower charges compared to other countries as the entire purchase and registration process is taken care of by a specialized lawyer. Moreover, property laws are in favor of owners rather than tenants.
Mexico is another attractive country for expatriates looking forward to buy property, especially retired expats. Combining a quality of life to a flexible investment framework, Mexico is praised for its developing cities such as Cancun, Playa del Carmen, San Miguel de Allende, Puerto Vallarta, and Acapulco. Nearly half of respondents indicate that buying a property in Mexico, whether as their primary residence or for rental, has proved to be a good investment.
