Bitter unrest in Hong Kong prompts city's ultra rich to look into relocating their families to the US
Hong Kong’s super rich are increasingly looking to buy homes in the United States and relocate there, having grown tired of local protests, moderating growth in the region, and escalating US-China tensions, according to Edward Mermelstein, a wealth management consultant based in New York.
His firm, One & Only Realty, handles relocation and related business including luxury property investment starting at US$10 million.
Over the past two weeks, his company has received four inquiries from Hong Kong clients about relocating their families to the US, with the intention of investing between US$10 million to US$100 million, he said.
Mermelstein said it was “an extremely unusual situation”.
“Hong Kong residents were typically just investors and had no interest in becoming US residents. But today, the conversations are definitely about relocating families and businesses,” he said.
Mermelstein has spent 25 years in the business of helping wealthy families relocate their families and fortunes to the US. He started with helping former Soviet Union citizens, including those from Russia, the Ukraine, and Kazakhstan.
Suddenly, the calls are from wealthy families from Hong Kong.
“There is a clear demand from the Hong Kong clients that they want to prevent the social unrest from disrupting their lifestyles, and they want to recreate comfort and safety for their families,” Mermelstein said.
“Given there is no sign that things are improving, I expect there will be a continued rise of interest from Hong Kong’s high-net-worth individuals regarding relocating to the US,” he added.
Hong Kong has been mired in protests since June 9, when an estimated 1 million people took to the streets to oppose a proposal to allow extraditions to the mainland.
The movement has escalated into wider protests and violent clashes. The protesters’ demands include the resignation of chief executive Carrie Lam and free elections.
The ongoing chaos has taken a toll on the local economy. Hong Kong retail sales fell 6.7 per cent year-on-year in June. Specifically, the sale of luxury goods, such as jewellery and watches, plunged by 17.1 per cent.
Local GDP in the second quarter contracted by 0.3 per cent from the previous quarter, based on advanced estimates, and should further weaken in the next few months, due to the protests and fallout from the US-China trade war, said Rajiv Biswas, Asia-Pacific chief economist at IHS Markit.
Mermelstein said some of his Hong Kong clients are originally from the Chinese mainland.
They moved to Hong Kong as the first generation for a more stable and promising future, but are now keen to move further away from China to protect their wealth and families.
Most of the clients work in the finance industry as bankers and fund managers, Mermelstein said.
“We have handled a considerable amount of business with clients from mainland China in the past five to 10 years. But I have never seen interest from Hong Kong picking up so quickly,” he said.
Kingston Lai, founder and CEO of Asia Bankers Club, a club which deals with alternative investment services for bankers, said they have received about 35 inquiries about emigration from Hong Kong in recent weeks, more than three times what is usual.
“Based on the current trend, we anticipate a significant increase in inquiries in the coming months,” Lai said.