Rising property market – Vietnam

With a communist government, most would not have considered Vietnam potential ground for a thriving real estate market. Their property market suffered a severe blow about 4 years ago when property bubble burst, leaving banks in debt and buyers and developers defaulting on their loans.

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Photo Credit: Phuoc Thanh Construction

But 4 years on, the government has injected stimulus into the real estate sector of up to US$1.4 million and has also restructured their banking sector to ensure history does not repeat itself. In fact, they have gone even further to relax rules on foreign investment money coming through their borders. Foreign firms, individual buyers as well as Vietnamese who have left the country during the war in 1975 – the Viet Kieu, are now able to purchase properties in Hanoi. And response has been overwhelming. One developer, Vingroup, reported a whooping 112 deposits on apartments within 2 hours of their launches specifically targeting foreigners and Viet Kieu.

Most foreign firms are keen to purchase properties to house their foreign staff. Intel and Samsung, which are situated in the Saigon Hi-Tech Park, are just a couple of the many international firms snapping up properties. Average prices of high-end apartments in the southern commercial hub go up to as much as US$1,800 per sq m. In the capital, prices are around $1,600, a number familiar to the property players before the last housing crisis. With a market value of US$21 billion, Vietnam’s real estate sector still has a way to go compared to Singapore’s US$241 billion, but that difference could be what most attracts investors.

London home prices rising

If you’re looking for London properties marketed overseas, you may not be seeing the whole picture as there has been an increasing number of properties which are marketed strictly in the United Kingdom alone. The number of foreign buyers of London property has been on the rise, and Londoners are getting a little agitated by the recent influx, which is not aided by rising home prices.

WestfieldHouse_Wandsworth_LOndonRecent additions to the London property market include luxury homes in the Nine Elms district in London. Lauded to have luxury fittings by Versace, they join the ranks of highly-priced and prized properties in the exclusive and expensive districts of Knightsbridge, Kensington and Chelsea. Situated in the borough of Wandsworth, prices of the luxury apartments here are twice the average of properties in the area, ranging from £1,600 to £2,000. Developments in this district include the Battersea Power Station, with 20% of the buyers coming from Singapore. Singaporeans have also made up 5.3 per cent of overseas buyers of prime properties in London.

BatterseaPowerStation

Photo credit: batterseapowerstation.co.uk

Despite an increased stamp duty this quarter, home prices in London which have dipped slightly, are still high as demand for properties in less expensive suburbs continue to rise. But locals are becoming disgruntled as London faces a housing crunch with simultaneously rising property prices. Would this indicate possible changes in policies and regulations in the year ahead? How would that affect foreign property investors?

Buying a property in Australia?

Properties in Australia or any city outside of home have always been a little of a mystery to local investors, though more are moving to these territories especially with the number of students studying overseas increasing. Rules and regulations for foreign ownership of properties in Australia are subject to change thus it would be prudent to keep up-to-date with movements in the industry.

BeliseApartmentsMelbourne_1The most recent change include a levy of A$5,000 on homes up to A$1 million and A$100,000 for every subsequent A$1 million. Foreign buyers are only able to purchase new properties and not resale ones and are required to adhere to regulations set by the Foreign Investment Review Board. Enforcement of these laws have been a little lax in the past, with some buyers getting away with purchasing resale properties by using cash. But checks may be stricter now, with jail terms of up to 3 years or a fine up to A$127,500 for foreigners found to breach the rules. Firms aiding them will also be fined up to A$637,500.

Despite these new levies and restrictions, Singaporean investors may not feel the effect as the levies are merely a fraction of the cost of properties there. Australian cities popular with Singaporean buyers include Melbourne, Sydney and Perth. For investors interested to make their initial foray into the Australian markets, there are avenues to secure advice and assistance, especially with upcoming International property investment exhibitions and estate agencies out there specialising in foreign investments in specific regions. As always, doing your homework will ensure a safe and stable journey ahead.

 

Lowering property prices in Iskandar

Overseas property investment has never been easy, but for those with insight and who keep a close eye on the ebb and flow of the property market in specific cities, it may pay off in the long run.

In the Iskandar region for example, there is said to be an imminent price war as Chinese developers aggressively purchase and develop land banks in the Iskandar regions. The most recent bid was by Shanghai’s Greenland Group who bought a 52 hectare waterfront are in Tebrau Bay.

PuteriCoverIskandarMost Malaysian developers are now holding back on their launches in order not to be cannibalised by launches helmed by these Chinese companies. Especially since these Chinese firms themselves are already offering discounts of up to 15 per cent. Property analysts have taken these to signify a possible supply glut in the region. But does this mean it could be the best time to invest, depending on the outlook of the specific region, district and development? How can you best get the most out of your investment buck?

Property seminars and talks are some of the best ways to get started and of course, keeping track of global economics and country-specific policy shifts would only help in making a determined decision. The ability to withstand temporary setbacks in wait of a bigger pot of gold in the long term would no doubt be useful as well.

 

Making timely overseas property investments

The strengthening Singapore Dollar, in particular against the Japanese Yen and Malaysian Ringgit, may be just the incentive to look outside of the country for possible property investment opportunities. So what new launches lurk in these 2 countries, ripe for the picking?

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Photo credit: CBRE

In Tokyo, a 883-unit high-rise Global Front Tower in the Minato ward is calling out to investors with their 4.5 to 5.1 per cent yield. With prices starting at $740,000 for a 780 sq ft unit and going up to $1.04 million for bigger units in the 912 sq ft range, it might be quite a steal considering its prime location near the city’s main Yamanote Line. Situated within the development itself are amenities such as a childcare centre and convenience store, pluses for rental.

HarbourCity_Melaka

A little outside the Iskandar region, in the much-loved tourist spot of Malacca, a new mixed-use development made up of a hotel, mall and theme park, could be just the thing for those looking for investment properties somewhere closer to home. The Harbour City development, which off the coast of the new off-shore man-made islands of the Melaka Gateway development, is targeted to open by 2018 and will attract new tourists to the already popular city. Securing a unit in one of its 780 suites may give buyers the opportunity to own a holiday home of sorts which earns you cash even while you are away.

In short, property investment opportunities outside of Singapore are there, it is simply a matter of research and keeping an eye on property trends, and striking while the iron is hot.

2015 – Outlook for Asia’s property market?

2015 is nearly here, and there has been talk that come next year, the property scene in Asia might experience some changes.  Investment interest in Asia property looks to be on the rise as portfolios which have yet to establish a presence in this continent consider it time to do just that.

ScottsSkyParkIt is probable that some governments might ease up on property cooling measures, thus making it easier for foreign investors. China-based investors have already been buying properties within and out of Asia. And as sellers lower their expectations and prices, they look set to continue doing so, if not more voraciously.

In Singapore alone, the outlook for office space looks extremely positive as supply remains low. With many more developmental and redevelopment opportunities arising within the next few years, the demand for office space is likely to rise, thus supporting commercial property prices and rents.

On the residential front, property prices are expected to see a drop of up to 10 per cent as the full impact of the large and fast increase of new properties finally hit the market. However, the luxury home market may see an influx of new investment money, especially properties will good long-term value.

Decline of home prices not reflective of cooling measures’ power

It all boils down to holding power. Of both buyers with their mortgages and home loans; and developers with their unsold units. Despite a year of seemingly repressed property market growth, the actual decline in home prices as a direct effect of the property cooling measures may not be as steep as it feels like. In fact, URA figures show only a 3.9 per cent drop in prices since Oct 1 of 2013 to 30 Sept of this year.

TheVermontCairnhillSince the property boom of 2009, home prices have increased 65 per cent till the end of 2013. Whereas the drop this year is a mere 4 per cent. Which means, property prices are still more than double of what they were before 2009.

Though the average total quantum price of homes may have dropped, the psf prices are maintained at a reasonable level as the main change comes from the diminishing property sizes. Though buyers’ affordability now ranges between $1million to $1.3 million, figures which have held steady for the past 5 years; the median sizes of new homes have fallen from 1, 195 sq ft in 2009 to 753 sq ft in 2014. This is a sure sign that developers are still holding on to their asking prices while giving less in terms of liveable space.

Resale homes are holding up better than new homes however, with a 3 per cent drop as compared to a 6 per cent drop of the latter. This is largely due to developers’ offers of discounts on unsold units. Examples of these can be seen at The Vermont At Cairnhill, and also at Sky Habitat, where more units were moved after a 10 to 15 per cent cut in prices.

Moving into the new year, property analysts are expecting sales volume of next year to be similar to 2014’s, though home prices are unlikely to experience a drastic drop. Rather, a gentle decline into a comfortable equilibrium is what most experts are prone to agree on.

The future of Singapore’s property market – Looking outwards or inwards?

The property industry experts are hoping that the Government will take crucial and timely steps to aid the country’s property and construction sector should trouble loom.

8scape Malaysia property

Photo: 8scape Residences in Malaysia.

Redas (Real Estate Developers’ Association of Singapore) president, Mr Chia Boon Kuah recently mentioned that the impact on the property sector could similarly transfer to an impact on the country’s overall economy. The vacancy moving forward is expected to hit 10 per cent as the number of new properties reach 68,000 in the next few years. Transaction volume has declined by half of last year from 18,000 to 9,000.

There were also talks about the languishing luxury property market here. The stricter measures and higher taxes may be reasons for wealthy investors looking elsewhere in the region for property investment opportunities and even draw Singaporeans away from investing within their own country.

However, with possible interest rates hikes and stimulus slowdown in the United States, interest in overseas property investment may be waning. As the local property market cools, and prices start coming down, some may also choose to take the wait-and-see stance, possibly holding their horses for a good future run in the local markets. How will the market fare in 2015 and will buyers be drawn to local or foreign properties?