SNAPSHOT OF SOME ASIAN PROPERTY MARKETS

Screen Shot 2015-09-21 at 9.44.20 AMOur contributor, James Hartland gives a snapshot of promising markets in Southeast Asia as revealed during the recent International Realtors Conference and Regional Leadership Summit held in Manila, the Philippines.

Malaysia has shown a general slowdown in its real estate market, according to Alex Gomez, for the following reasons:

The Malaysian government has cooled down the real estate market, due to recent legislations that have been introduced, which includes introducing GST (Goods & Services Tax) on property purchases (excluding residential property).

They have also discouraged investors from ‘flipping properties,’ by increasing the tax on the profit of any sale to 30% in the first five years. After five years, this tax falls away to 5%, encouraging longer-term investors.

Currently, there is a glut of commercial property in Malaysia and the residential market has also cooled down, as substantial new projects complete. Gomez also explained that despite the current slowdown in the market, Malaysia still offers great opportunities and value for the longer-term investor. Recently Malaysia was voted as the 4th best country to retire to, as the cost of living is low and there is the lure of golf courses everywhere, as well as affordable housing. Furthermore, Malaysia has worked hard to encourage affluent foreigners to retire there, by designing various programs, to make life easier for them.

Screen Shot 2015-09-21 at 9.44.09 AMSingapore continues to be one of the most desirable cities to live in and retire to, in the world. This is due to its good governance, political stability and excellent infrastructure, making it convenient to access some of the other more dynamic markets in the region, says Jeff Foo.

There continues to be an increase of high net worth buyers into the real estate market for the above reasons, despite the government introducing measures to cool the market. The new measures are a stamp duty of 3% payable on the first property, 7% payable on the second and 10% on the third, which apply to local Singaporean buyers. A foreigner, however, has to pay 15% stamp duty in Singapore, which has made this market less appealing.

Japan has been in recession for decades and has now decided to pursue the same measures adopted by the US to turn around their economy. These include pumping money into the economy to get consumers spending again and creating employment, says Seiki Ochi.

There are great opportunities to buy properties for foreigners in Japan, as anyone, not only locals can purchase a home. There is a non-discriminatory policy and there are no special restrictions for foreigners. More people are now coming to Japan and there is more incoming foreign investment.

There is a huge number of new projects in Japan taking place presently and this will change the real estate market quite quickly in the future. The cities are being transformed and there is development and improvement of the infrastructure.

Thailand, unlike many other markets allows anyone to be a real estate broker, even foreigners. There are clearly disadvantages to this system such as lack of trust, a lack of career standards and difficulty in creating networks. Due to these, the foreign investor is shying away, says Somsak Chutisilp.

However, the future of Thailand’s real estate market is beginning to look much better. The second half of 2015 is expected to see a rise in new and re-sales and there is a new property Management and Licensing system being devised. Taxation for real estate will also be simplified for all.

Thailand is a popular destination for its culture, hospitality, shopping, tourism, low price, reliable rental yield and capital appreciation.

Vietnam has a population of 90 million, the third largest population in Southeast Asia. It has a young population with a large workforce and a growing middle class. Vietnam will be one of the main beneficiaries from ASEAN, as other more wealthy countries in the region invest there. It will need outside investment to help it develop its infrastructure and catch up with its more developed ASEAN neighbours, says Tran Ngoc Quang.

Whilst the real estate market is picking up, it lacks the transparency and legislation to make it a significant market for foreign investors to consider at this stage. However, as more foreign funds flow into Vietnam and with improving legislations, it will become a key part of ASEAN – this will only help Vietnam to grow and prosper.

james

James Hartland has been involved in property investment in the UK, Europe, Middle East and the Philippines. He can be contacted at j.hartland@astraasia.com www.astraasia.net

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