As coronavirus outbreak rages on, perceptions of a country's health security to sway investors' decision

By Cheryl Arcibalcheryl.arcibal@scmp.com

/ https://www.scmp.com/business/article/3052202/coronavirus-outbreak-rages-perceptions-countrys-health-security-sway?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp |

March 4, 2020 5:52 PM SGT

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The ability of different countries to effectively deal with the deadly Covid-19 outbreak will serve as a new benchmark for property buyers, say market observers. With the rapidly spreading epidemic providing the stress test for a country's health security preparedness, there will be some winners and losers among the favoured investment destinations.

"After the epidemic, we expect health care to be even more important to buyers," said Georg Chmiel, executive chairman of property portal Juwai IQI. "Countries like Thailand, the US, the UK, Canada, and Australia, which have good health care systems and highly ranked abilities to react to viral outbreaks, are likely to benefit from an increase in buyer activity."

Chinese investors, one of the biggest sources of cross-border capital in property markets who spent an estimated US$120 billion in 2017, would be more conscious of health security in basing their decision, he added.

According to the latest Global Health Security (GHS) index report released in October, no country in the world is fully prepared for epidemics or pandemics, but the US, with an overall score of 83.5, has the best capacity to prevent, detect, and rapidly respond to public health emergencies such as a viral outbreak. The UK came second, followed by the Netherlands, Australia and Canada, respectively.

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The study by the Johns Hopkins Center for Health Security, Washington-based Nuclear Threat Initiative, and London-based The Economist Intelligence Unit assessed the capabilities of 195 countries.

Thailand, a favourite investment destination of the Chinese and Hongkongers, took sixth spot.

"Thailand seems to be doing a good job of managing the outbreak," Chmiel said. "The number of cases and deaths from the illness are about half or even better than the numbers in Japan, Singapore, Hong Kong, and South Korea."

Thailand was the first country after China to report cases of Covid-19. So far it had 35 confirmed cases, lower than the several hundred infections each in South Korea and Japan, and 90 in Singapore. Thailand has not reported any deaths.

"Cross-border property buyers are already considering health care and health systems among other criteria by which they evaluate destination countries. The reputation of countries like Singapore, Japan and Vietnam in this area will significantly impact future investment flows," Chmiel said.

A view of Auckland city from Mt Eden. New Zealand is a perennial favourite among property buyers. Photo: SCMP

For other potential buyers, perception of a country's health security could be enough to sway their investment decision.

Although New Zealand is ranked 35th overall in the GHS index, lower than South Korea (9), Japan (21) and Singapore (24), inquiries for investment in the country have risen by 32 per cent.

"Demand in New Zealand is always up when things globally look down. It's the classic safe place during a global crisis," Chmiel said.

For Singapore-based proptech company PropertyGuru, the alarming news over the deadly and rapidly spreading coronavirus is making buyers and investors "undeniably conscious of health security".

"I think countries such as Singapore, Malaysia, Indonesia, Thailand and Vietnam with lower infection rate and higher rate of recovery as well as robust precautionary measures taken would be favoured," said Tan Tee Khoon, country manager for Singapore at PropertyGuru.

On the other hand, investors might just look for health-related property segments as an investment option instead of focusing on a specific country.

This outbreak has made people more health conscious and has "highlighted the importance of health-care type of well-being related real estate investment projects", said David Ji, head of research and consultancy for Greater China at Knight Frank, citing the likes of health spas or medical resorts in Switzerland as a future growth area.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.

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