Where the property investment hotspots are
By EdgeProp Singapore
/ EdgeProp Singapore |
Attendees at Vietnamese developer Dat Xanh Mien Trung's showcase of its mixed-use development Regal Land in Quang Binh province at Space Furniture Asia Hub last Friday (Photo: Samuel Isaac Chua/EdgeProp Singapore)
SINGAPORE (EDGEPROP) - With soaring inflation, more investors are seeking cover in real estate investments, particularly in the shelter of the housing market. In Singapore, private home prices jumped 3.5% q-o-q in 2Q2022, on the back of two major project launches that quarter, namely Piccadilly Grand and Liv @ MB. Both projects were launched in May and sold more than 70% of their units on the first day of launch.
This was followed by the launch of the 372-unit Amo Residence at Ang Mo Kio Avenue 1. Jointly developed by UOL Group, Singapore Land Group and Kheng Leong Co, the project was 98.1% sold on the first day of launch on July 23. It set a new benchmark for prices in the Outside Central Region, with average selling price hitting $2,100 psf.
These sales were achieved despite rising interest rates and Singapore having one of the strictest limits on household borrowing in the world. “Stress tests by MAS [the Monetary Authority of Singapore] suggest that most households should be able to service their debts even under scenarios of sharp interest rate hikes and significant income losses,” said Ravi Menon, managing director of MAS, at the unveiling of the central bank’s FY2021/2022 annual report on July 19.
Singaporeans are already travelling abroad, armed with “one of the most powerful passports in the world”, according to the Henley Passport Index 3Q2022 global ranking, by investment migration consultancy Henley & Partners. Singaporeans, like the Chinese and Hongkongers, have a propensity to “travel and check out properties at the same time”, says Chua Shir Yee, JLL head of international residential sales, Singapore.
What are the options?
The Esse Sukhumvit 36, a freehold luxury condo development by a joint venture between Singha Estate and Hongkong Land (Photo: SOM)
Bangkok, Thailand
Bangkok was a popular holiday destination among Singaporeans pre-pandemic, with some purchasing a holiday home or investment property.
In 1Q2022, the luxury condo market in Bangkok partially recovered on the back of investor demand, particularly for buy-to-let properties, says Jeremy O’Sullivan, JLL head of research Thailand, in a 1Q2022 market update.
New supply of luxury condominiums was scarce, due to uncertainty over the pandemic. For investors on the hunt for an upscale development in Bangkok, there is The Esse Sukhumvit 36, a freehold luxury condo development by a joint venture between Singha Estate and Hongkong Land.
Singapore-listed property developer Tuan Sing Holdings has invested in its master-planned township development, Opus Bay in Bataom (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Batam, Indonesia
Prior to the pandemic, Batam was popular among Singaporeans for its wellness spas, from manicures and pedicures to massages. And for others, it’s seafood and shopping.
During the pandemic, despite the drop in tourist numbers due to border restrictions, Batam’s residential property market proved to be resilient, with prices holding steady.
According to the country’s central bank, Bank Indonesia, average property prices in Indonesia fell by 0.2% for the whole of 2021, and in 1Q2022, residential prices inched up 0.1% q-o-q.
A major stakeholder in Batam is Singapore-listed property developer Tuan Sing Holdings, which has invested in its master-planned township development, Opus Bay.
Am Tacheles, a master-planned, mixed-use development by Swiss architectural firm Herzog & de Meuron in Berlin (Picture: JLL)
Berlin, Germany
Besides enjoying craft beer, those travelling to Berlin can soak up the culture and history of Germany’s capital city. Over the past decade, Berlin has turned into a hot destination for start-ups and tech companies. That has led to a booming economy and population growth.
The result is a shortage of new-build apartments in Berlin. According to JLL Research, 20,700 new apartments are required in Berlin annually. There is a shortage of 250,000 apartments in the capital city as of September 2021, with vacancy rate at 0.9%.
Berlin’s population in 2022 is 3.57 million, while the home ownership is hovering at 18%, compared to the overall country, which has an ownership rate of 50.4% as at 2021.
Check out a new urban quarter at the centre of Berlin, Am Tacheles, a master-planned mixed-use development by Swiss architectural firm Herzog & de Meuron. AM Tacheles sits on the site of the former Kunsthaus Tacheles art centre, a landmark of cultural significance.
Already, the property market in the state’s capital, Johor Bahru, is seeing an increase in activity (Photo: Bloomberg)
Johor Bahru, Malaysia
Just across the border from Singapore is Johor Bahru (pictured below), the capital of Johor, Malaysia’s southernmost state. Prior to the pandemic, many commuted daily between the two cities.
The lifting of travel restrictions by land between Malaysia and Singapore since April 1, has led to a surge in the number of travellers across the two checkpoints at Woodlands and Tuas. The number hit a record of 282,000 travellers per day over the recent Hari Raya Haji weekend on July 1-3.
The return of Singapore visitors to Johor, along with the wider easing of pandemic-related safety measures, is expected to revive various sectors such as retail, tourism and hospitality. This will, in turn, provide an uplift to the real estate market as sentiment improves.
After a pandemic-induced lull, property prices in Johor are expected to gradually pick up this year. Already, the property market in the state’s capital, Johor Bahru, is seeing an increase in activity. At Setia Sky 88, a freehold condominium in the city by Malaysian-listed developer SP Setia, interest has picked up considerably from both local and Singaporean buyers.
The 15ha MediaCityUK, located on the banks of the Manchester Ship Canal at Salford Quays in Greater Manchester (Photo: MediaCityUK website)
Manchester, UK
Manchester is famous for its two football clubs (Manchester City and Manchester United), its museums and culture, and its history as “Cottonopolis”, once the world’s biggest centre for the cotton and textile industry. It is now the second biggest city in the UK after London.
Besides its Victorian structures, Manchester has some of the most forward-looking architecture. It is home to the second biggest media hub outside of London: the 15ha MediaCityUK, located on the banks of the Manchester Ship Canal at Salford Quays in Greater Manchester.
According to the JLL Cities Index, Manchester housing rents have increased 58% in the last 10 years. Meanwhile, housing prices in Manchester have increased by 233% over the past 20 years, surpassing even the 198% growth recorded in London over the same period, says JLL.
The latest residential development to be launched in Manchester’s MediaCityUK is High Definition. The 280-unit apartment development was launched in March this year, and is expected to be launched in Singapore sometime in 3Q2022.
Artist's impression of The Velaris Residences, a joint venture project between Hongkong Land and Robinson Land, in Bridgetowne, a township located between Pasig City and Quezon Citty (Photo: RHK Land)
Manila, Philippines
A wave of optimism has swept the Philippines as its economy is expected to rally strongly post-pandemic. This bodes well for the residential real estate sector, especially in the key Metro Manila market. With more companies beckoning employees to return to the office, demand for condominiums around Metro Manila is gaining traction, according to a report by Cushman & Wakefield Philippines.
Foreign buyers keen to capitalise on the economic and property market rebound should stick to buying property from developers with an established track record, according to Cushman & Wakefield.
Foremost among the established property developers in the Philippines are Hongkong Land and Robinsons Land. Their joint-venture company, RHK Land Corp, is developing a luxury residential condominium project called The Velaris Residences in Bridgetowne, a township located between Pasig City and Quezon City.
Regal Legend, an ambitious urban complex on a 21ha site at Dong Hoi, the capital city of Quang Binh province in Vietnam by Vietnamese developer Dat Xanh Mien Trung Group (Picture: Dat Xanh Mien Trung)
Quang Binh province, Vietnam
For those who want to visit nature parks and a Unesco World Heritage Site in Vietnam, Quang Binh province would be worth considering. It boasts many natural attractions, the most famous being its caves (404 in total), mountains and sandy white beaches. The most famous of its caves are Phong Nha Cave and Paradise Cave, as well as Son Doong Cave, the biggest cave in the world. They are located within the Phong Nha-Ke Bang National Park, a Unesco World Heritage Site.
However, Quang Binh lacks the luxury quality accommodation, facilities and infrastructure worthy of an international tourist attraction, according to Vietnamese developer Dat Xanth Mien Trung (DXMT).
DXMT is investing VND10 trillion ($594.1 million) in Regal Legend, an ambitious urban complex on a 21ha site at Dong Hoi, the capital city of Quang Binh province.
Tokyo house prices grew at a CAGR of 5.6% between 2014 and 2021, according to JLL (Photo: Bloomberg)
Tokyo, Japan
A perennial favourite holiday destination among Singaporeans is Japan. And when it comes to purchasing an investment property, many have focused on the capital city of Tokyo.
According to JLL Research, Tokyo house prices grew at a CAGR of 5.6% between 2014 and 2021. Even at the height of the pandemic, prices remained resilient, growing by 14.2% in 2020.
While the pandemic resulted in a slowdown in the city’s population growth — as border closures and lockdowns restricted movement and migration — a rebound is expected as Japan opens up again.
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