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Asia Property Investment - Hot Market in Asian Countries

Apr 19, 2008
Asia is currently going through what is widely known as a "Property Boom". Real estate is a highly recommended area for investment in Asia. Almost all countries in Asia are flourishing in the real estate sector. China is going through a revolutionary phase in the real estate sector. Rural homes and paddy fields are transformed into roads and shopping attractions. However some parts of the country the foreign investment and job opportunities have not created a real flutter. Costs of real estate are steadily increasing and anybody who is investing in the region could make handsome profit.

China has begun a huge drive towards urbanization. It is understood that they are relocating about 20 million people each year from country border to the cities. Very much the same is happening in the whole of East Asia as this half of the continent undergoes a strong urbanization drive. Asian governments are doing everything in their power to woo foreign buyers and investors. However supply hasn't kept pace with demand which has boosted rents and capital values.

Malaysia has a favorable government in terms of property investment as the interest rates are only 6.75%, which is lower when compared to interest rates imposed by other countries like Vietnam and Indonesia. Prices of different kinds of properties continue to be cheap, particularly in comparison with other countries in Asia.

However this situation may not remain the same for a long time as at the close of 2006, the government dispensed with the requirement that foreign buyers should have the permission from a foreign-investment panel. This move is expected to have a positive bearing on the property market, especially on the mid-to-high end property segment.

Hong Kong is also getting increasingly cheap. This is clearly shown by the fact that rental rates for office space staying at $1,105 in 2006, lower than $1,237 in 1994. Because of mortgage competition between the banks and the steady decline of apartments city's residential prices are predicted to rise more than 50% by the end of 2007. Considering the case of The Zurich and Monaco the potential threat is the vulnerability that has plagued the US economy. Many East Asian countries, whose economies depend heavily on exporting goods to America, will be affected quite badly by the state of the US economy.

Keeping this in mind, Singapore has the most attractive property investment opportunities in this part of Asia over the next two to three years. The Chinese manufacturing boom has been a real eye opener for the Singapore government. The various governments have started to redistribute their resources with the aim to make their respective cities as financially viable as possible. Singapore offers the lowest tax rate in the world for beginning companies, while 80% of firms spent an effective tax rate of less than 10%. Singapore is also very popular among tourists and this makes it even more compelling for potential investors. Unemployment has come down to a floor of 2.5% and as a result immigration is given an active encouragement.

About half of the 176,000 new jobs created last year were taken up by foreigners. The government expects that another 450,000 jobs will be created over the course of the next five years. This has given a real boost to the property market, which was hardly affected by the Asian financial crisis of 1997. The Singapore government has ended restrictions on borrowing limits in 2005 and as a result purchasing among Singaporeans has become active again.

Even after all these alterations the prices have remained relatively cheap. In comparison with equal cities in the Western world cities like London or New York, Singapore is cheaper. Property is considered a safer bet when you take the equity markets into consideration because of its lack of stability to a US downturn.

If you are interested in property investments, there may not be so many better choices than the Asian property market. There could be some problems in the future though like the possible lack of availability of homes when foreign workers searching for homes could create a scarcity. However, at least for the time being, Asia is among the most lucrative property markets available. Always be alive to it at the time of investing because you could commit on a healthy investment.
About the Author
Gregory S. is an independent author providing assessment and comments on leading International Property Consultants in Asia and Greater China , especially CB Richard Ellis.
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