Job Discussion Forums

[cmp45]

Hi,
Interested to know if there are any teachers that have purchased property outside their country of residence; particularily Canadians.

I have been looking for financial institutions that would be willing to provide assistance(loan) but have yet to find any that would assist me.

It seems immpossible for Canadians living abroad trying to purhase property in another country.
I am hoping to buy a flat in Goa, India. The Indian banks do not provide loans to expats.
Anyone have any suggestions / information as to where I could find an appropriate bank willing to provide a loan with 10 - 15% down payment?
Or is this wishful thinking?

[Zero Hero]

I do not think you will have much luck trying to find anyone to lend you money to purchase property overseas. In fact, I doubt if it is even legal. I think you should begin to think about why this may be. (Also, you should ask yourself why, if it was possible, everyone does not do it.)

If you defaulted on your payments, how would the lender begin proceedings against you if you are abroad? They will not have any legal recourse as you would be outside of the jurisdiction of the system in which they operate. Also, as the property is abroad, how would they ensure its quality (this is especially true in a Third World state such as India)? That is, how would they guarantee the property is worth what you pay for it? They are not going to throw good money after bad. If you default on your repayments and they wish to repossess the property, how would they go about it?

No, no one save for perhaps loan sharks will lend you money to purchase property overseas.

[PAULH]

[Chris_Crossley]

Getting married to a local undoubtedly helps.

My Chinese wife and I have just moved into a brand-new apartment of our own in a brand-new housing complex on the south side of Furnace City (Wuhan). We have been married for over three years and we jointly earn quite a lot of money compared to the locals.

Both of these factors - a stable marriage (with kid) and high income - mean that we have been able to put our feet on the property ladder. Provided that we prioritize our mortgage repayments first, we should be able to pay it all off within five years, not 20.

My wife was the one who dealt with everything, so all I have to do is to provide most, if not all, of the money for the mortgage payments. To us, it is a very good investment.

If I were still single and unattached, though, I believe that it would simply be impossible to buy my own property in China - unless someone else knows any different. Perhaps having guanxi helps?

[Zero Hero]

[Zero Hero]

[Chris_Crossley]

[Volodiya]

I'm not planning, at this time, to buy in China, but the phenomenon of owning an apt that is built on land leased by the developer/condo association is not unfamiliar to me, and far from making such a purchase uneconomical or unwise, it is just one additional factor that you put into the equation when you calculate value.

Last time I looked, the maximum term of lease the Chinese government was giving to developers was 70 years. I'm looking at condos in Thailand, and about half of these seem to be built on leased property, some of which is leased for as little as 30 years.

China allows foreign ownership of private housing in approved projects (there are many of them in every large city).

It's not necessary to be married to a Chinese citizen or even be a resident of China to do it. I personally know two families who have purchased flats in my area, neither of which is in the country on more than an F visa and neither of which is married to a Chinese. One paid U.S. $120,000; the other $150,000 for large, luxury flats. The first is an investment advisor who plans to live in China for the next five years; the other, an American university professor who comes to China for research, from time to time. Both bought, rather than rented, in part because they felt the capital gains would be significant, over the next five years.

The examples I gave represent somewhat high end stuff: there are lots of new flats on offer here in a range starting well below $50,000.

Life is neither so dangerous, nor so full of pitfalls, as some people seem to think. Surprising numbers of people seem to meet with success in most things they attempt. Buying property is often one of them.

[Zero Hero]

[Volodiya]

I wrote:

[Chris_Crossley]

[EnglishBrian]

cmp45

If the amounts of money involved aren't too large it might be possible to get a 'personal loan' rather than a mortgage to fund (or partially fund) a project like this. Obviously with mortagages (and the lower interest rates they offer) lenders are very picky and have very strict regulations. Personal loans seem to be pushed at your right left and centre by banks - for a car, or to furnish a flat for instance, but I realise don't often lend enough to buy propoerty. However, I bought in Lithuania 5 years ago for USD10,000 and will probably sell this year for USD60,000.

[Zero Hero]

I think you have erred, 'Chris'.

Yes, the PRC may well want to promote, encourage, and foster (call it what you will) foreign investment, but not at the cost of loss of any control.

Around one year ago people said that there was no way the PRC could introduce capital gains tax on properties as there would be a "backlash" against the policy. Well, not only did they indeed introduce such a tax (on all properties sold within two years of purchase), but they also backdated the law (and, needless to say, there was no organised "backlash").

If you decide to invest in a state that openly purports to be communist then you must be prepared to take the rough with the smooth. They can expel you from the country and take that property off you tomorrow if they so wish. It has happened before and I see no cogent reason to think it will never happen again.

You seem to assume the existence of (western conceptions of) logic on their part, and you seem to credit them with the gift of logical thinking. But, I would have to ask, in which other areas of life on the Mainland can you place your hand on your heart and say something is logical in the western sense? Is it logical for a rice-eating nation such as China to become dependant on rice imports from potential enemies (as they now have done)? I think not. Is it logical for twenty-odd (by Chinese standards, well-educated) executive bankers to attempt to enter a lift before those already inside alight? Again, I think not. Is it logical to spend billions of Yuan on putting a man into space when you have 700 million-odd peasant farmers surviving on as little as 500 RMB a year, rampant poverty, mediaeval-style hospitals, and widespread disease? I think not. I could continue the list but I think you will get the not too overly subtle point.

A few weeks ago they introduced the capital gains tax on all properties sold within two years of purchase, and in a few weeks they may introduce other measures. Being a property owner in no way makes you a prophet, especially not in China where profits take priority over prophets and profitability takes priority over prophecy.

Also, has your wife explained to you that, as a foreign national, you have no ultimate rights to that property whatsoever? If she divorces you then it will be hers, lock, stock, and barrel.

What I find most disturbing about your post is your statement that your wife dealt with 'everything' to do with the financial details of the mortgage. I am willing to bet there are a few details about which you know absolutely nothing (consider the etymology of 'mortgage'). How long, for example, has the government of the PRC leased the land on which your property is located to the developers? Have you seen the statistics of the (frighteningly high) number of property developments that simply topple over after a few years? Chinese construction projects are hardly renowned for their quality, are they? What was on the land before the concrete jungles began to appear? There are cases of luxury flats being built on disbanded army camps, and even asbestos factories. After a few months the lifts begin to never work, the electricity supply becomes random at best, and mercury begins to appear in the tap water.

Without wishing to put too much of a dampener on your spirits (I know how exciting it is to become a property owner), I would be very surprised if your building was still standing in five years, let alone fifteen (and I think most Chinese people tacitly accept this, but they simply fail to care; remember, they live for the moment, not for the future).

To be quite frank, I would rather have my money under the bed than tied up in bricks and mortar on the Mainland. The high-rises that went up as little as two years ago in Shenzhen and which originally sold for as much as one million RMB now resemble something from 1960s Romania or present-day buildings in North Korea. They are, to say the very least, something of an eyesore.

Besides, who exactly do you think would ever want to buy your property from you second hand? Why would they not just buy a new property, as you yourself did? I really think you ought to put any ideas of a re-sale out of your head. It is a nice plan, but, as the sage Robert Burns said in his poem 'To a Mouse':

"The best laid schemes o' mice an' men
Gang aft agley,
An' lea'e us nought but grief an' pain
For promis'd joy."

My advice would be to expect the best but to prepare for the worst. And in China, the worst really can be quite horrific (as many discovered in the last revolution).

[PAULH]

[cmp45]

Yes It is a big dilema at this point. My assumption that to obtain a loan working outside the country of origin one must have a larger down payment at least 25% or more and the loan is good for purchase only within the persons country of origin. Also possiblity of having a co-signed loan by a relative ( not going to happen)....However, I can't help but think that there must be international organizations (besides loan sharks) that offer loans... for people like me??? If not then there should be!
Perhaps this is a moot point and will just have to wait until I have all the money and pay for it all at once.
Any how just thought I would put the question out there.
cheers