On today’s show we’re going to pick up on a story that we covered several months ago. The headlines these days are about Covid-19, it’s impact, and the slow vaccine rollout. The papers are headlining updated economic stimulus plans, the surging price of silver, surging AMC stock prices and the military coup in Myanmar.
Frankly, these are all important, but there’s something far more important to pay attention to, and it’s not making headlines.
I’m talking about the handling of the situation in Hong Kong. Depending on how the world responds to the Hong Kong situation, will likely determine how China acts when it comes to Taiwan. Hong Kong is the dress rehearsal for Taiwan in my opinion.
You might be wondering what all of this has to do with real estate investing. Stay with me and I’ll make the link in just a minute.
One of the things that can dramatically affect local real estate is migration. When people pick up and leave due to political situations, we can see large scale migration.
Two weeks ago the Hong Kong government told UK citizens that they will need to choose between the having British status or Chinese status.
The new policy was in reaction to the British Government’s decision to allow people with BNO status, which is British Nationality Overseas status to apply for a visa and have a path to citizenship where they would eventually get a British passport.
China stated that as of Jan 2021, the BNO status will no longer be recognized.
The British government estimates 5.4 million Hong Kong residents are eligible for the scheme, that's about 72% of its 7.5 million population in Hong Kong.
These include:
- 2.9 million BNOs
- 2.3 million dependents of BNOs
- 187,000 18-23-year-olds with at least one BNO parent
It is difficult to say how many eligible people will actually come to the UK. The latest estimate from the UK government puts the number expected to take up the offer at 300,000.
There are about 80,000 people in Hong Kong who hold US passports, and 300,000 in Hong Kong who hold Canadian passports. The unofficial number suggests that as many as 500,000 Canadians may reside in Hong Kong.
So the question is, how many people may choose to leave Hong Kong in favour of their second passport. It’s hard to believe that things will get better for foreigners living in Hong Kong. It’s not like the climate will get more business friendly, or that individual citizens’ rights and freedoms will improve in the coming years. So the question is, how many will leave and how soon?
So what does this mean for real estate investors?
We could see a significant influx of residents from Hong Kong in the coming months.
It’s most likely that they will move to a coastal city that already has a large Cantonese community. Remember, people in Hong Kong don’t speak Mandarin. They speak Cantonese. This is a different language. The culture is different. We can expect people to favor cities like Vancouver, Toronto, San Francisco, Seattle, and a few others.
If 300,000 Canadians were to land in Toronto, or Vancouver, where would they go? Yes, there is some vacancy, but not enough to absorb 300,000 people.
If 80,000 Americans were to land in San Francisco, Los Angeles or Seattle, where would they go?
I believe there is a window of opportunity for investors that are paying attention, who can clearly identify the needs of Hong Kong residents looking to relocate in North America, to deliver a product ideally suited to the needs of someone coming to the US or Canada in a hurry. Maybe they’ll send the kids across first and then follow later in 6 months when personal and financial affairs are in order.