Looking for seasoned advice about investing in Asian countries like Malaysia, Singapore, mainly south-east asia. Any leads, people or companies I should contact? Things to look out for legally or governmentally etc...
I thought you had to be a citizen/resident of those countries to own property there. Could have changed but I have a few client who had to put there trust in the locals to get in the door, so to speak.
I know in indonesia you will need to understand there are two types of land /house ownership,some contracts have a statement that the goverment owns the land but not the house(bizzar)and other contracts include land and house as your own to have for ever...I have looked into realestate in many different areas of indo,and some are just fantastic,ie..6 bed room all with onsweets for around 500k!!in securtiy estates,landscaped gardens and including house keepers/cooks!!but don`t expect any decent returns from renting out any type of realestate as the average income is around 60 bucks a week and less in some communities!!!these places are good for holiday homes but at the end of the day I end up staying in good hotels if I am in that country for more than 4 weeks,as I living there has its draw backs(too many to mention) .good for business and socializing,,good luck...
The word to remember is FREEHOLD. It's only a few countries that will give buyers freehold ownership, that can be passed down to your descendents forever.
Malaysia is one such place. Singapore comes to mind, as does that other bubble-pit Hong Kong. Japan is also generous with property rights for foreigners.
Remember: it's possible to buy property in other countries, but you generally do not get freehold property rights.
My favourite pick would be the top end of the Malaysian condo market. With a lot of new supply coming on-market (thanks to generous planning regulations) there is plenty of time to pick and choose. Proceed with caution though. Getting retro historical prices is nigh on impossible and you need to have your wits about you to ensure you don't pay too much.
You don't have to be a citzen or PR of malaysia to buy in malaysia. There is even a second home scheme enabling you to buy property etc. At the rate AUD is going it is close 1AUD to RM3.
Besides if you have a home there fully paid off. you could just refinance with HSBC or some other local bank 2% rate and then buy in Australia. giving a much better return. Obviously some risk in foreign exchange but still more + than -.
My understanding that HK property is sold on a 99 year lease, not freehold. For what it's worth, I reckon that within Hong Kong Po Wah Yuen village on the island of Lamma is where I would put my $. Lower entry cost, foreigners like to live there (previously hippies but more and more suits) and maximum height restrictions of three floors which, by HK standards, is low rise. That said, they have an even more complex village ownership system... which can be overcome as quite a few foreigners have bought there.
I think the lack of freehold is not a big concern.
I personally wouldn't care if my property was only leased for 70 years because you'd suspect with the capitalist path China and the rest of Asia are now on, modifications will come in some point along the way to protect people's interests. Furthermore, 99 years... not that I really care. I'm more interested in which city will outperform in the next 20 years and how I can maximise the value of my currency now.
As for HK, I've always had a liking to get a place near my parents' but probably can't afford it (in Repulse Bay). I'll probably look at Kowloon Tong and am going to go around looking abit this November as I'm travelling to HK and Guangdong area for a month. I really like the estates above the Festival Walk shopping centre and Kowloon Tong is probably one of the top spots in Kowloon (since I can't afford the island side and want to be able to pay off the apartment in 3-4 years). They're going for around $6m-$7m HKD at the moment, which is under A$1m... probably bigger than the Carlton 2-bedder terrace I'm going to get.
Contributors to and readers of this thread may be interested in checking out a fairly comprehensive posting that I have submitted regarding property in Indonesia. It appears in this forum under the thread headed Buying in Bali?
As mentioned there, I have lived in Batam, Indonesia (just 12 miles across the water from Singapore) for eight years and am involved in property development here – hence a very powerful reason for getting up to speed on how the Indonesian land system works and how to purchase with security of tenure.
By the way, provided you take the trouble to do your homework there are great opportunities in selected parts of Indonesia and some of the other countries of the region.
We are doing renovations and remodelling of a previously run-down housing complex and converting the properties into blocks of up to four Western standard apartments (typically 2 bedrooms x 2 bathrooms of about 85 to 100 sq m) within a gated community. We are targeting expatriates.
We are retaining most of the renovated properties as serviced apartment rentals for the expatriates working under contract in this island’s booming heavy fabrication and manufacturing industries – we cannot meet the demand as the regional economy is booming (in part because of work being done for major oil and gas industry projects in Autralia).
Unfortunately the banking system here simply does not provide finance for property and housing purchases in the way we are all familiar with in Australia and other developed Western countries.
Consequently we are now selling some of our properties (15 blocks of three or four apartments) in order to release capital for further acquisitions and construction. By the way, we cannot sell them as individual apartments as there is no strata title system as we know it.
As someone interested in property investing in Australia you might find some of the numbers here a little startling – we are selling newly-completed and fully fitted out (but unfurnished) apartments at around SGD$120,000 (AUD$94,500).
We are then offering to lease them back for an initial term of 10 years at 11% of the purchase price with an annual rental inflation adjustment typically of 5% a year. There are also buy-back provisions after two years.
A purchaser who borrows against property assets at home as security to buy here will have positive cashflows with 100% gearing at interest rates up 7.5 from Year 1 (after allowing for quarterly common property contributions, local authority charges, insurances and taxes).
We then add the furnishings and decorations and operate the properties as serviced apartments and we still make money from the sub-leasings.
Yes, we are in a niche market but it demonstrates the kind of opportunity that is around for those prepared to look. Generally you need to be looking to expatriates as tenants or prospective buyers. As yet too few locals have enough income or money and those that do probably will prefer not to buy from a “foreigner”.
In our experience most Westerners buying in Asian countries – other than those with employment, business or immediate family reasons (Asian spouses) – tend to be looking to retirement or for a holiday retreat.
Many are looking at property in places like the beaches of Thailand, the Philippines, Malaysia and Bali where they can usually get much more for much less than the popular retirement destinations in Australia.
Usually they also can live for much less and enjoy a higher standard of comfort with a limited retirement income while experiencing involvement in a different and interesting culture. Not everyone’s cup of China tea but a real appeal for increasing numbers.
As mentioned earlier in this thread by Melbournian a number of countries in the region are encouraging relocation by Western retirees with Malaysia leading the way with its Malaysia My Second Home program – it’s worth checking it out on the Internet.
A couple of other quick points –
1. You certainly do not need to be a citizen or a permanent resident to purchase property in Indonesia (see the post referred to above for more information).
2. Let’s put the Freehold v Leasehold issue into perspective – remember that virtually ALL of the residential land in Canberra and the ACT is held under 99-year leasehold title and there are plenty of people posting on this forum who are very happy indeed with the property investments they have made there. Much of Singapore also is held as leasehold.
For authoritative information on the Indonesian land laws and foreign purchasing check www.okus.net. Go to the resources pages where there is a paper by highly regarded corporate and business consultant Gary Dean. One small erratum – the paper indicates the main form of leasehold is limited to 50 years but the term in fact varies from province to province and in Batam is 80 years.
1. About the Batam website: c'mon guys, lift your game. If you are a legitimate organization then you have nothing to fear by revealing the full family names of your directors on your website. Do you seriously expect us to invest with you when you identify yourselves by your first names. http://www.smilinghillbatam.com/smilingpeople.html
2. The mere mention of the local flesh trade on your website (prices and all) blows me away - no legitimate organization would mention it on a corporate website. Very, very dodgy. What sort of customers are you trying to attract?
Fair enough Menconium but a bit rough that you do not mention that the one sentence you have quoted from our website is in the context of 5,000 word essay describing many aspects of the social scene in Indonesia and Batam.
And this is just one page of a 17-page site with a serious amount of general and accurate (and, yes, sometimes frank) information.
For what it's worth all of the Western people directly involved in our project here are married to Indonesian wives and we all have young children. Our operation is very much family oriented and we are actually working on how to establish schooling arrangements so our youngsters can follow a combined Australian/Indonesian curriculum.
Maybe you should come and have a look sometime. Indonesia is a very interesting (if sometimes challenging) place and contrary to popular Australian media perceptions of "mad mullahs" and potential bombers the people here are very warm, welcoming and generous.
By the way, agree with csc2 about Vietnam - the China Sea coastline is magnificent and the people there also surprisingly open to Westerners given the history of conflict prior to 1975. The people are very industrious and the economic potential is high but would like to know how the land laws and foreign ownership work there. Any experts out there?
That's great. I'm going to Chengdu in 2 weeks, along with some inland places such as Xian and Chongqing. Main reason for visit is work-related in Hong Kong, but I thought I'll tour to Xian and also check out some apartments in Congqing and Chengdu. Any good recommendations? Looking for some more upmarket apartment blocks.
Also looking at 貝沙灣 in HK atm... but a bit expensive for me. Thought I'll go there though since I saw Stephy Tang buy there but after I found out the entry price I had second thoughts