Owning an idyllic property on the beach, amongst the palms or amidst a luxury resort where all your needs are taken care of is the desire of many who dream of getting away from it all. Asia is still a prominent region for both the aspiring and seasoned property investor offering a diverse variety of tropical lifestyles, island escapes, resort villas and condominium living. Not all Asian countries are the same, and this diversity of climates and geography whilst offering innumerable choices also begets a divergent spectrum of security, rule of law, currency fluctuation, liquidity and most importantly return on investment.
China is studying regulatory changes that should soon make it easier for Chinese citizens to invest overseas, looking to relax the current US$50,000 annual limit under its Qualified Domestic Institutional Investor programme to as much as $2 million. This will be an extremely positive move for the region as a whole, especially for emerging economies such as Vietnam and Cambodia. These two countries are also attracting foreign investment and are relaxing foreign ownership rules. These are still relatively unknown markets with positive investment potential though with a certain amount of volatility that has yet to settle down to allow articulate and reasoned projections.
Two countries in the region stand out as having significant growth potential: Thailand, a perennial favourite, and our current favourite, the Philippines. With more than 7,100 islands and some of the best beaches in the world the Philippines is one of the best investment locations
Despite the recent political turmoil in Thailand, the country’s economy is growing and recent figures released have shown that this grew 3% in the first quarter of 2015. Thailand has for many years been the country of choice for Europeans, Asian urbanites and the expatriate diaspora to purchase or build their holiday home, weekend retreat or asset-based nest egg. Popular investment areas such as Phuket and Koh Samui still attract a fair amount of foreign investment but this has resulted in a huge mark up in the cost of purchasing that dream property. Having said that, there are still plenty of options for the discerning investor throughout Thailand especially in resort-run and managed apartments and villas that allow foreign ownership, often backed with developer guaranteed rental returns of up to 8% in some cases.
The Philippines is booming, no longer the ‘Sick man of Asia’. In the last few years under its new anti-graft government and their commitment to investing in infrastructure, it is now the second largest growth economy in Asia. The country is seeing an influx of tourists from the region and further afield resulting in more medium- to high-end resort developments offering quality-build, freehold and investment opportunities with annual returns reaching 10%.
With a population of approximately 100 million, this strong economic development is spawning a service industry revolution producing a growing middle class and a strong local demand for rental properties. A significant contributing factor to this growth is the development of roads and utilities and the upgrading of regional airports such as Cebu and Boracay, opening up these regions for business and leisure travellers.
As with all property investment decisions, due diligence should be foremost in the buying process. ALFA Investors work with trusted developers who are quality-oriented and have a successful track record in build quality and managing their portfolios. Foreign ownership in investment properties can be a perplexing task but with a trusted investment partner the reality of owning that dream property mitigates the potential nightmare of doing it alone.
Tony Smyth is Head of Marketing at ALFA Investors Ltd, a luxury resort and city property specialist based in Hong Kong. He can be contacted at firstname.lastname@example.org or +852 2110 8712. Or visit the website: www.alfainvestors.com