In 2020, Southeast Asia became a hotspot for investors or companies, from the rapidly growing economy to a rising middle class, there is no doubt that the region shows huge promise for the future, especially real estate investment.
Southeast Asia holds a number of things that define good investment potential, from strategic assets, market efficiency, and GDP growth. Beyond just the top cities to invest in for real estate, we take a look at some of the top countries to consider down below.
- Capital: Ho Chi Minh City
- GDP: USD$261 billion (2019)
A lot of people have been putting their eyes on Vietnam for the past several years now, especially it’s capital Ho Chi Minh City. With a quickly growing economy that is averaging at 7% and a digitally native young population that has a median age of 25-30 years old, the country is seeing massive growth in terms of infrastructure, finance, and real estate investment.
Not only is Vietnam known for having some of the best yields ranging anywhere from 6-8%, there have been some developers that are offering as high as 12%. As a comparison to the most competitive economy Singapore which experiences yields of 3% or lower.
Furthermore, the country is comparatively cheaper than other cities nearby such as the aforementioned Singapore or even Bangkok. Luxury property can be purchased for as little as $USD 3000 per square meter, whereas places like Bangkok would be double or triple that.
- Capital: Jakarta
- GDP: USD$1.11 trillion (2019)
Not only is Indonesia known for its great potential economy, with projections that it may stand in the top 5 highest GDP nations in a decade or two, but the country has also been showing great potential in property investors. Despite the global volatility and countless natural disasters, the country’s real GDP growth remained stable, with both private and government consumption picking up in the country.
With the rise of urbanization and industrialization, the economy of Indonesia is growing at a super-fast pace with an average of more than 5% annual GDP growth. In 2019, the property price index rose by 1.77%, with a continued rise since 2014. Furthermore, 17 out of 18 major cities in the country witnessed nominal property price rises in 2019.
With the nation unveiling the emergency stimulus package that is worth USD$8 billion as a way to protect the economy from the coronavirus, there is great potential that the country may show quite a lot of room for fast recovery in the coming years. In this package, USD$104 million is for subsidized housing program.
As an added plus, the rental yields in Jakarta specifically is moderate to attractive. Not only are higher end apartments only USD$2,500 per square meter, the yields for such apartments can range from 5.2% to 7.7%.
- Capital- Kuala Lumpur
- GDP: USD$364 billion (2019)
While many people estimate that Malaysia’s great housing price boom has subsided, this does not take away from the country is a hotspot for real estate investment. Not only is the country expected to grow by 6.7 percent in 2021,
According to the National Property Information Centre (Napic), Malaysia’s property market transaction volume and value decreased 27.9% and 31.5% respectively in 2020. Comparing this to the previous year, while that may be a drop from the previous year, this is no surprise for most nations across the world, as almost all property sectors have been hit badly due to the coronavirus.
Despite the slow down of the overall market, Malaysia’s condo prices are still fairly cheaper than other surrounding cities, standing at about USD$2,000 per square meter. Furthermore, the country itself is relatively stable, with the residential property prices rising and falling by a few percentage points — an indicator that it is never shocked by sudden crises such as a pandemic, with no boom or collapse. In other words, adjusting for inflation, the prices have been stable for the past 15 years.
- Capital: Bangkok
- GDP: USD$543 billion (2019)
Despite some investors stating that Thailand’s housing era has ended, the country continues to remain firmly placed as one of the hottest spots for real estate investment — especially for Chinese investors. Not only is it the No.1 tourist attraction in the world, for Chinese buyers specifically, but the country is also ripe for opportunity for property investment.
Thailand ranks as one of the top countries for real estate investment in Asia because of its friendly attitude with foreign investors and growth in real estate investment demands. The country is also popular worldwide due to its wide range of exported products and the Thai government has adopted several policies to boost the real estate business.
The ability to buy freehold property and lowered taxes compared to other surrounding regions is what makes the country quite popular for foreign investment. Moreover, the country also is strategically placed geographically, with Singapore, Malaysia and Vietnam close by.
- Capital: Singapore
- GDP: USD$372 billion (2019)
Although the landmass is rather small, especially compared to its other Southeast Asian counterparts above, Singapore is one of the most highly-developed free-market economies of the modern world. Beating out the US as the world’s most competitive economy since 2010, Singapore was also the 16th best country in an international survey in terms of entrepreneurship, quality of life, and business.
Although Singapore saw its lows back in 2017, there has been a lot of rebounding confidence for the country in terms of real estate investment, as it was one of the few markets that saw an uplift in transactions during the beginning of 2020. The country is more regulated than places like Hong Kong and in terms of quality of living, is incomparable to many of its Southeast Asian counterparts. Not only does the country have an incredibly low crime rate, but it also has a huge ex-pat community.