Overseas property – New frontiers

Malaysia. Australia. London.

There are the usual hotspots for Singaporean property investors. But have you ever wondered what else is out there for the taking? Which other markets have green pastures providing long-term fodder for the profit-hungry?

Dubai, which once saw plummeting real estate prices when a bubble burst, is recovering well and once again housing prices are on the rise. To catch the property on its up cycle would be every investor’s dream. The Dubai authorities have since tightened up regulations, targeting in particular speculators. Their Real Estate Regulatory Agency, a regulatory arm of the Dubai Land Department, has rolled out a rental index which is updated every four months. As Dubai continues to expand as a commercial hub, the stream of expatriates who will be looking for rental units keep investors happy for now.

Vida Residence DubaiPhoto Credit: Emaar

Besides commercial properties, some of the most sought-after residential real estate in the Emirates are in popular communities and districts such as Downtown Dubai, Dubai Marina, Arabian Ranches and Emirates Living.  The 57-storey Vida Residence in Downtown Dubai with 320 serviced apartments are selling one-bedders for approximately S$660, 000.

Japan, which most would regard as one of the countries with the highest standard living, surprising has some good property investment opportunities. The low yen has no doubt helped. In the highly populated Tokyo for example, properties in Shinjuku and Shibuya, the 2 most popular shopping districts, are popular with investors. Since Tokyo won the right to host the 2020 Olympics, interest in properties near the proposed Olympic stadium in Harumi have also gained momentum. These include the freehold Harumi Tower with prices starting at S$900 psf. Just 800m away from the Tokyo Tower is the 13-storey Concieria Mita, a freehold property with studio apartments going at a surprisingly competitive S$436, 000.

Conciera Mita condo

Photo Credit: ECG

So it might truly be worth the time and effort to look beyond the usual suspects for investment opportunities which might be more profitable than fighting for those closer to home.

Get help investing in Iskandar properties

The next time you’re thinking about investing in properties in Malaysia, don’t just sit there and surf the net and wonder about all the possibilities from the couch. Property developers are increasingly aware of the growing interest in Malaysian properties, especially those in Iskandar Malaysia, and are organizing regular trips to allow potential investors a more in-depth peek into the workings and actual environment of the properties just across the border.

Meridin Suites in Malaysia.

Meridin Suites in Malaysia.

Ascendent Assets, for example, offers weekend training courses which provides the participant with tips and tricks about investing in Malaysian properties. There is quite a lot of know as the rules and regulations change quickly and new updates are always available. And unlike investing in a property close to home, foreign property purchases have a bigger risk factor, which can be cut down by finding out all you can before putting your hard-earned money into the pot. One of the pluses about this course is the meeting of Iskandar Regional Development Authority officials and the ability to visit and inspect the actual sites. Getty Goh, Ascendent Assets’ Director advises investors against leaping into the deep end with the idea that the property market in Malaysia is as fertile as in Singapore.

Malaysian property developer, Mah Sing, holds similar weekend excursions and is experienced with buyers interested in their Medini-based development, The Meridin @ Medini. Most of them are drawn to the urban-style living which comes with the corresponding convenience of hotels, shops and hospitals nearby, but increasingly the development of EduCity which will feature international universities have also proven to be a strong pull factor.

Developers also provide an option for experienced investors who are familiar with foreign property purchases but may be shopping around for the best deals. Property clubs, usually run by real estate agents, allow a group of like-minded individuals to get together and explore different markets and network with relevant individuals in the Malaysian market.

So there is help out there if you are willing to look hard enough. And unlike before when it’s like stepping out into the dark, there is now many beacons to help guide you on your way.

Private property rents may drop

Many property investors count on rental yields, immediate or future, to boost profits. However, with the sheer number of new homes being built and launched, raking in immediate profits may be tougher than before. As population growth slows and immigration policies tighten, finding a suitable tenant may not be easy.

In fact, if you’re thinking of selling your property, resale prices may also suffer because of the surge in the supply of new properties, private and public. By 2017, the market is projected to have an entry of 100,000 new private non-landed homes and 123, 000 HDB flats. At a 7 to 8 per cent increase in annual landed home supply, this may be the quickest that new non-landed properties have grown thus far.

One Eighties ResidencesWhat this means for landlords may be lowered asking rental prices as competiton heats up and tenants have more options to choose from. Based on previous market cycles, when vacancy rates push the 7 per cent mark, rental prices tend to correct and passing the effect down the chain, resale prices will also be affected.

Some industry experts are expecting a 10 to 15 per cent drop in rental and selling prices between now and 2016. However, others are expecting a gentler drop of 5 to 10 per cent as most of the new units are HDB flats which cannot be sold in the open market within the first five years, thus reducing the actual number of available units for sale. In addition, a number of these new homes may be occupied by home-owners rather than merely purchased for rental purposes, thus once again taking a chunk away from available rental units.

Either ways, this may be a time to be smart about spotting value-for-money, investment-worthy properties which have longer legs and can withstand hard knocks from global and local policy influences. Seeking advice from experienced property investors, analysts and attending property seminars are a good way to get started.

Spot apartments selling below $1,000 psf

In the current real estate landscape, private apartment units going for less than $1,000 psf are rare. Or sold out.  But there are still some units on the market at affordable prices.

The Interlace private condo apartments on Depot Road.

The Interlace private condo apartments on Depot Road.

Some of these units are in private residential projects such as A Treasure Trove, D’Nest, H20 Residences, Palm Isles, Riversails, Riversound Residences, Stratum, Seastrand, The Beverly and The Interlace. With the sheer number of units available at massive project, The Interlace, it has the most number of units available for sale at 216. Median selling price is slightly higher at $1, 053 psf. The good range of property types include three- and four-bedders as well as penthouses and garden homes.

Riversails has 108 units of its 920 apartments available for sale at one of the lowest median selling prices of $854 psf. At Toh Tuck Road, the 118-unit The Beverly, each unit serviced by a private lift, 7 units were still on the market for an approximate $826 psf.

The Beverly on Toh Tuck Road.

The Beverly on Toh Tuck Road.

This might be good news for buyers looking to buy new properties. Though new homes may be smaller in size as compared to resale homes, it may be just right for those looking to invest or who prefer good location to a large space. And don’t hold your breath yet for newer launches offering selling prices below $1,000 psf. Industry analysts are expecting most new launches to offer units at above the mark.

Moving forward, property experts are expecting buyers to continue on their buying spree, but with more caution. They might be more selective and prefer smaller homes at a lower price quantum. Property developers may also be more cautious and precise with their pricing, to target buyers who may be more susceptible to slight price differences. With most developers having a strong holding power, it could be a tussle between them and the buyers.

No better time to Invest in Overseas Property

Simply because if the time is right for you, it is the right time. There are risks, which comes with all types of investment of course, but you can certainly make wise, calculated decisions by attending property seminars, speaking with experienced industry experts and doing your own research.

expo_sg_2013

With information of overseas property becoming more accessible and detailed, and with online sources available 24-7, information is at your fingertips, literally. Why purchase a property in Asia? It is nearer to home, and also makes a good holiday home option. Depending on the rules and regulations in the country of purchase, properties are cheaper and have more space for growth. And rental yields can be substantial, if you invest in the right property in the right location. Compared to Singapore properties, where home loans and buying curbs are increasingly being implemented, the real estate landscape overseas could be more fertile for short-term investment.

Horizon Hills in Nusajaya, Johor, Malaysia.

Horizon Hills in Nusajaya, Johor, Malaysia.

Malaysian properties are increasingly popular, especially with strong and steady developments at the Iskandar region. Horizon Hills in Nusajaya, Johor,is part of the Iskandar Malaysia development. Movenpick WHite Sands PattayaNear enough to Singapore with properties half the price or less of the same here, with the luxury of the space of your own, landed homes here are easily accessible via the North-South Expressway, Malaysia-Singapore Second Link, Skudai Expressway and the Perling Expressway. Cluster housing within a spacious buy cosy 1,200 acres, it encourages family and community living.

Looking further north into Thailand, beachfront living in the heart of Asia is offered by Apex Development. Situated in Pattaya, the Movenpick White Sands Beach Condotel development provides investors the opportunity to take part in a hotel development by purchasing hotel rooms which they can in turn earn rent on. This development is nearing completion, is targeted to be ready by end 2013.

But if it an urban lifestyle you fancy, Ayala Land, part of the Ayala Corporation in the Philippines is offering up that possibility at your doorstep. A variety of properties under the Ayala Land umbrella will put you in the centre of Makati city, Manila, with conveniences, shopping and much more in the vicnity.

Garden Towers and Escalada Scelod condominiums in the Philippines. Photo by Ayala Land.

Garden Towers and Escala Salcedo condominiums in the Philippines. Photo by Ayala Land.

Still undecided about which to go for, or perhaps you might even be considering a few, the iProperty International Property expo is where you will find all these developers and more, under one roof, presenting collections and properties at the same time. It might just be the best way to do your research, consult with experts, gather various information and compare pros and cons across the board before signing on the dotted line. The exhibition runs from 26 to 28 July at the Marina Bay Sands Expo & Convention Centre and you can pre-register here.

Iskandar Double Happiness

If you were one of the early uptakers at the Iskandar development in Malaysia, you may be laughing all the way to the bank now. Residential properties, in particular condominium units, at the major up-and-coming development across the Straits have doubled in price since it began selling early 2012. Compared to condominiums which were launched and completed even further back, prices now have nearly tripled. But older completed projects are usually situated in less sophisticated or desired locations.

Most of the homes which sold earlier on were landed residential properties, but now the high-rise lifestyle have been calling the shots. Compared to projects launched early last year, prices new apartment developments have almost doubled. Property developers have all jumped on the bandwagon and are ramping up the supply and quality of condominiums. Up to 13, 500 more condominium and serviced apartment units are expected to be built within the next 3 to 4 years. Previously, only 8, 000 homes were built within 6 years, from 2006 to 2012.

Taken at the iProperty.com Expo: International Collection, Marina Bay Sands Expo Centre, Oct 2010

Taken at the iProperty.com Expo: International Collection, Marina Bay Sands Expo Centre, Oct 2010

Afiniti Residence in Medini, in the Iskandar Nusajaya zone, launchd last weekend with units ranging from RM850 ($340) psf to RM1,000 psf. Units at the nearby iMedini which launched in January 2012 were sold then at RM450 psf. Puteri Harbour is another area within Iskandar Malaysia which have proven popular with buyers. It is considered the equivalent to Singapore’s Keppel Bay area. Freehold condominium, Pinetree Residences, launched earlier this year in March, at RM1, 210 to RM 1,616 psf. Serviced apartments Somerset Puteri Harbour Iskandar was also launched at the same time for RM800 psf.

Iskandar ResidencesHowever, buying activity is the busiest around the RM400 psf range, though developers have been pushing for the sales of high-end luxury condos. Besides Singaporeans, who make up a big sector of the property-buying pie at Iskandar, a Japanese firm has also bought an entire 285-unit tower at Iskandar Residences in Medini.

With the rate things are going, it takes a real savvy investor to make his buck go the longest way. It helps that there are many property investment seminars and experienced property agents out there who are sharing their views and advice.

UK properties popular with Singaporean buyers

Highwood HouseSingaporeans are increasingly aware of the value in overseas property investments, with some properties in the United Kingdom seeing as much as 60 per cent of its buyers hailing from this little red dot. The 999-year leasehold 20-unit Highwood House is one such piece of real estate. Units range from 386 to 831 sq ft and start from £590, 000.

Overall, Singapore property investors made up 40 per cent of buyers in British private residential properties, spending an average of £700,000 ($1.3 million) per investor per property. Not unlike buying property in Singapore, in the UK, buyers also lean towards apartments which are near schools, universities, transport nodes as well as the prime London retail shopping zones and attractions such as the Thames.

The rise in the number of Singaporean investors in the UK could also be due to the increase in the number of launches here and in Asia. CBRE alone brought in 9 British property launches in 2011, and 11 more in 2012. This year, they are planning 18 launches to draw buyers to potential homes in the UK. The Singapore Dollar’s rise against the sterling, and the sheer number of new properties in the prime central London area are reasons enough to bring in the numbers for these residential developments.

Fulham Riverside in London. Photo by fulhamriverside.com.

Fulham Riverside in London. Photo by fulhamriverside.com.

Properties which have quickly been picked up by Singaporeans and Malaysians at their Asia launches include the 237-unit Fitzroy Place, the 214-unit Fulham Riverside and the 28-unit Regents Gate House which catered to a niche market of high net-worth investors. As the global and local property markets evolve and adjust to each other, it will be prudent for investors to keep a constant update on property news and new property launches as well as attend property talks and seminars.

Rise in property prices at Iskandar Malaysia

As planning, building and construction continue at the Iskandar Malaysia project development site, property investors are catching on quickly and lapping the residential properties all up. The recent hike in property prices definitely seem to say it all. Property agents from both sides of the causeway have reported an astounding and sudden spike in foreign interest and sale prices of property in the area.

Taken at the iProperty.com Expo: International Collection, Marina Bay Sands Expo Centre, Oct 2010

Taken at the iProperty.com Expo: International Collection, Marina Bay Sands Expo Centre, Oct 2010

Is it mere hype or can this activity be sustained and for how long? Will there be a time where investors find themselves holding on to lesser than they had hoped for?

Property agents have been busy showing potential investors the show houses and apartments in the territory and even in Singapore,  Malaysian property launches and expos have been garnering renewed interest. The fervent buying could also be due to various countries in Asia tightening their foreign property investor policies, countries such as Hong Kong, China and Singapore. This could be driving investors to look elsewhere in Asia and even in Europe and the States.
Puteri Harbour

The Puteri Harbour scheme, featuring luxury waterfront villas, apartments, serviced residences, hotels and commercial developments, have been one of the top picks so far. The promise of good international schools such as Malborough College in the vicinity has also helped rakes in some interest from expatriates. Waterfront properties in Danga Bay and Permas Jaya have done equally well.

A faint indication of how  the prices have changed since 2006 when Iskandar was first launched can be seen in the prices of bungalows in Ledang Heights:

  • In 2006 – RM25 to RM30 psf
  • In June 2012 – RM60 to RM80 psf
  • In 2013 – RM100 to RM120 psf

Prices have risen more than five times the initial launch. Pure speculation or true reflection of what future the Iskandar development holds? Will you be looking to invest in Malaysian properties and do you know where to begin? Don’t forget to keep a lookout for useful tips and learn how to plan your finances for long term investment from industry analysts and experts at property events, seminars and launches.