Private bankers are beginning to help wealthy Asians find investment and short-term residences overseas, according to recent reports from the International Herald Tribune. The wealth management divisions of banks have entered the business of setting up short-term revolving loans for property purchases. Typically five years in length, the loans are renewable annually after that, and the interest rate is set according to the individual’s credit.
Michelle Tan, leader of real estate product management at Bank of Singapore explains, “many wealthy people may want to maintain their liquidity rather than just applying in to the real estate assets, as liquidity allows them to take advantage of investment or business opportunities that may arise.
Interest rates in the region are low, prompting investors to borrow against property and use cash for other higher-return investments. Borrowing in Asian countries also allows investors to avoid banking with Western banks, which are experiencing higher loan interest rates.
Barclays, which has reported a buying trend in London, has also seen increased interest in investment in properties in Australia and New York, “where clients are often interested in potential returns and also in purchasing homes for use by their children who may be looking at attending overseas universities,” explains Bryan Henning, head of global research and investments for Asia at the wealth and investment division of Barclays.
As the American economy continues to take strides towards recuperation, New York City continues to offer a solid real estate market. Investors who are seeking residency through EB-5 Visas are entering the real estate market at a good time.