Looking for big ‘fry’: The motives and methods of middle-class international property investors

Abstract

Anxieties about the effects of international property investment in world cities like London have mainly focused on super-rich investors and corporate vehicles that have generated price inflation of assets and accelerated exclusion from an already expensive market. In fact, many international investors in the city's housing market are middle-class individuals, and focusing on Hong Kong as an emblematic example of such processes, we examine their motives and the products offered to them by important investment intermediaries. We find that an important rationale for these investments lies in local class-based uncertainties and existential anxieties concerning the future of Hong Kong itself. We focus on the cultural roots of these investor rationalities but also consider the role of investment intermediaries who have helped bolster confidence while shielding investors from the consequences of their aggregated market power -concerns in London over household displacement from foreign investment. We suggest that what may seem to be the predatory search to 'fry' property ( ), a Hongkonger colloquialism referring to the search for high performing investments, should also be understood as actions anchored in and generated by the habitus of the Hong Kong middle class whose lives have been moulded by historical geopolitical uncertainty and worries about its longer-term social positioning and security.

Introduction To The Forum: From Third To Fifth‐Wave Gentrification

“…International capital also flows into gentrifying and already gentrified neighbourhoods through the investments of transnational wealth elites – or simply the super‐rich – and increasingly also upper middle classes into, respectively, ‘super‐prime’ and other classes of residential real estate in elite tourism capitals, prime global cities like London and New York and a range of second‐tier global cities such as Vancouver and Amsterdam (Fernandez et al ; Hay & Beaverstock ; Webber & Burrows ; Atkinson et al ; Ho & Atkinson ; Ley ; Rogers & Koh ). In many cases, these individual investors, especially the transnational wealth elites, do not buy super‐prime real estate to profit from high rents, but rather they use houses and apartments in a select – yet expanding – group of cities as a ‘safe deposit box’, a place to store their excess capital safely (Fernandez & Aalbers ).…”

What Motivates Speculators to Speculate?

“…As such, popular and scholarly housing debates, for example in London, are concentrated on the super-rich as stated by Atkinson [ 59 ], Hay [ 60 ], and Hay and Muller [ 61 ] in terms of patterns of consumption, economic power, and political control [ 62 , 63 ]. Moreover, parks are considered safe havens for park property [ 64 ] and produce rental income that often outgrows inflation compared to lower interest rates on savings accounts and weaker returns on investment of financial products [ 65 ]. There is evidence that, since the early 1990s, middle-class buyers from Hong Kong have been investing in London’s main property market as noted by Ho and Atkinson [ 65 ].…”

“…Moreover, parks are considered safe havens for park property [ 64 ] and produce rental income that often outgrows inflation compared to lower interest rates on savings accounts and weaker returns on investment of financial products [ 65 ]. There is evidence that, since the early 1990s, middle-class buyers from Hong Kong have been investing in London’s main property market as noted by Ho and Atkinson [ 65 ]. Although Hong Kong’s first wave of investors primarily focused on property for their own use, second and third wave investors emerging between 2000 and 2009 were interested in financial returns (i.e., short-term investment or long-term rentals).…”

One and the Same? A Systematic Literature Review of Residential Property Investor Types

“…Ho and Atkinson (2018) work with two categories: very wealthy and lower-middle income investors. While not specifying the monetary details of these two investor groups, they argue that counter to public perceptions, it is new middle-class investors instead of the super-rich shaping London's property market (Ho and Atkinson 2018).…”