Asians continue to invest in the West

The movement of money from Asia to Western markets in Europe and the United States will likely still be a major influence on global real estate this year, according to the Global Emerging Trends in Real Estate 2015 report jointly published by PwC and the Urban Land Institute (ULI).

The report, based on the views of senior global property investors, found that 84 percent of Asia-Pacific respondents expect cross-border capital into Europe to increase significantly.

Local money coming out of China and South Korea will continue moving into international markets, and will be supplemented in the coming years by pension fund capital from Japan.

The so-called ‘flight to safety’ effect was cited as another reason leading many investors to move capital to perceived safe havens.

Meanwhile, money flows into major assets in the UK and US is likely to shift towards less high-profile cities in Germany, France and the US, noted the report.

Simon Hardwick, PwC Legal partner and one of the report’s authors, said: “There is still a wall of capital targeting real estate opportunities in many markets across the globe. The search for better yields has taken some investors into development and secondary markets, moving them up the risk curve. But investors must strike a balance between the need to deploy capital and the ability to achieve good returns, at a time when there is such a difference in the economic conditions across the globe.

“Real estate investors have a wide range of issues to consider when making investment decisions. What is clear is that they may have to approach those decisions in a completely different way in the future. Capital allocations may need to be made to a wider range of asset types than ever before, ranging from retirement and student housing to data centres and self-storage.”

Romesh Navaratnarajah, Singapore Editor at PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg

Chinese buyers to solve Iskandar’s housing glut

The large number of residential properties in Iskandar Malaysia can be absorbed by the market claim Chinese developers, as they bring with them fresh demand from China’s growing middle class.

“We have one million owners in China, and it’s like a fan club. Wherever we go, there are just buyers that buy without any questions,” said Nicholas Hum, Sales and Marketing General Manager at Country Garden Holdings.

The Hong Kong-listed firm has been criticised for its enormous Forest City project, which is being built on reclaimed land close to the Tuas Second Link.

At a separate development in Danga Bay, across the sea from Singapore’s Sungei Buloh Wetland Reserve, the developer is building a condominium which it hopes will be as successful as its other housing projects in China.

In 2013, this project surprised the market when 6,000 of its 9,400 units were reserved within a month of its launch. Although some unqualified buyers were subsequently filtered out via the loan application process, the figure of 6,000 has remained due to later sales, Hum said.

This year, 200 units have so far been taken up at the project, and Country Garden is optimistic that more buyers from China will back this development.

In fact, the Chinese have become the largest buyers of this project, accounting for 35 percent of the units. The second largest group are Malaysians who have bought 30 percent of the units, followed by Singaporeans (25 percent).

In addition, some Chinese buyers have applied for the long-stay visa scheme under the Malaysia My Second Home programme, noted Hum.

“They’re trying to come here more frequently and without restrictions. So it’s not just a summer home, it’s a second option.”

Chinese buyers are also being lured by world-class learning institutions at the nearby EduCity and the prestigious British boarding school Marlborough College.

“A lot of them are concerned about their kids. They plan quite far ahead,” he explained.

Image: Artist’s impression of Forest City by Country Garden.

Farah Wahida, Editor at PropertyGuru Malaysia, wrote this story. To contact her about this or other stories email farahwahida@propertyguru.com.my

Good time to buy Europe Property?

The euro is shaping to be the biggest casualty of Switzerland’s decision to scrap its currency cap. 

Soon after the Swiss National Bank unexpectedly ended its three-year policy of keeping the franc weaker than 1.20 per euro, bearish bets on Europe’s common currency soared. While setting a record low versus the franc yesterday, the euro also plunged 3.5 percent against a basket of 10 developed-nation peers, the most since its 1999 debut, and reached an 11-year low against the dollar today. 

The SNB’s decision removes a key pillar of support for the euro, boosting the odds that its recent slide will accelerate. Companies from Goldman Sachs Group Inc. to Pacific Investment Management Co., the world’s biggest manager of active bond funds, have in recent days talked about the euro falling to parity with the dollar, a 14 percent decline from its current level. 

Options Jump 

The difference in the cost of options to sell the euro against the dollar, over those allowing for purchases, jumped by the most in almost two years yesterday, and extended its advance today to the highest since August 2012. 

The euro also sank below parity with the franc yesterday to an all-time low of 85.17 centimes, recovering to 98.88 today. 

In defending its cap on the franc, the SNB almost doubled its holdings of the 19-nation currency to 174.3 billion euros ($202 billion) since September 2011. Speculation the European Central Bank is only days away from announcing a government-bond purchase program, or quantitative easing, at its Jan. 22 meeting had already weakened the euro against its major peers. 

“The euro can’t find a friend for love nor money,” said London-based Kit Juckes, a strategist at Societe Generale SA, which predicts a decline to $1.14 by year-end. When one of the biggest buyers of euros “leaves the building,” losses are inevitable, he said. 

Options traders appear to agree. The premium on three-month contracts to sell the euro versus the dollar, over those to buy, rose 0.4 percentage point in the wake of the SNB announcement and another 0.5 percentage point today. 

That took the cost premium to 2.17 percentage points, 25-delta risk-reversal data compiled by Bloomberg show. Yesterday’s jump was the biggest one-day increase since February 2013. 

The shared currency’s next-biggest daily decline was a drop of 1.6 percent on Jan. 5, 2009, when the dollar surged as details emerged of a U.S. fiscal stimulus plan to tackle the global financial crisis. The franc jumped 21 percent against the basket yesterday as policy makers removed the euro cap.

So, is it a good time to buy properties in Europe??

“I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.” – Warren Buffett

Seize the opportunity to buy when prices are low!

Malaysia is third best place to retire

Was reading property guru. Malaysia has been voted the world’s third best place to retire based on International Living’s Annual Global Retirement Index for 2014.

Malaysia came in behind Ecuador, Mexico and Panama, but was ahead of all retirement destinations in Asia. Other Asian nations included in the index, although way behind Malaysia, were Thailand, the Philippines and Vietnam.

Under the caption “Malaysia – Great Value for Money in a Cultural Melting Pot”, the index noted that more and more expats see the amazing opportunities offered by Malaysia each year.
“The country has one of the most robust economies in Asia, and this is reflected in the consistently high standard of living available to locals and expats alike. It’s just one of many factors that led to it being ranked the highest Asian nation in this year’s index,” it shared.

Why is Malaysia a great places to retire?

1. Quality of life within the country is considered to be excellent and cost-efficient. 
2. Explore innumerable natural, historical, and cultural treasures that Southeast Asia has to offer. 
3. The proliferation of cheap Asian airlines in recent years has made it easier (and more affordable) than ever to explore Thailand, Indonesia, India, and Japan. In Malaysia, Asia is truly at your doorstep”.

International Living cites the example of Thomas O’Neal, a New Yorker who lives in Penang.
“I rent a 1,600-square-foot apartment with an amazing pool, just five minutes’ walk from the ritzy Gurney Plaza shopping mall,” O’Neal is quoted as saying.
“It costs me just US$ 850 (RM3,000) a month. I don’t need a car, either, so I’m saving money left, right, and centre. I love the weather – 82 degrees Fahrenheit on average – and the ease of getting to Thailand, Cambodia, Vietnam, and Laos. When you combine that with a cost of living of US$ 1,500 (RM5,295) per month, including my rent, it’s almost unbeatable.”

Nonetheless, International Living informs potential retirees that “ultimately no list or formula can automatically deliver the best destination for you. Only you can decide that”.
“Only you can assess your personal preferences, needs, budget and desires, and look at the options available to see which nation best suits your needs”.

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Why Invest in overseas property?

Seeing that local properties were moving slow due to the cooling measures, i decided to venture to overseas proprieties. Why has investing in overseas properties seen a rise in sales? It because it provides low capital layout and high rental return yields.

Though home prices in most Asia countries are extremely expensive and see slow capital appreciation, emerging counties like Cambodia, Philippines are still great investments.  Just today, news about property prices in Cambodia abstracted from Phnom Penh Post.

"Political stability, economic growth and foreign investment have led to doubled land prices in four of the capital’s central districts compared to 2008, when prices bottomed out due to the financial crisis, according to a report.

From the second to the third quarter of 2014 alone, land prices in the districts of Chamkarmon, Daun Penh, Prampi Makara and Tuol Kork went up by 20 per cent in commercial areas and 30 per cent in residential areas, the Bonna Realty Group study found.

In Chamkarmon’s Tonle Bassac village, high-end condominiums such as The Bridge and Casa Meridian helped push residential land prices up to $2,000 to $2,500 per square metre, while commercial land sold for up to $4,000 to $6,000. 

Tonle Bassac remains cheaper, however, than Chamkarmon district’s Sihanouk Boulevard. On the centrally-located strip of land from Monivong Boulevard to Independence Monument, commercial land is priced at $8,000 to $9,000 per square metre, a 10 to 15 per cent increase from the second to the third quarter of 2014. The high prices have scared off some investors from developing land in Chamkarmon, the report noted.

The riverfront’s Daun Penh district, on the other hand, had a wider variation in prices, with residential land priced from $500 to $4,000 per square metre. The study noted that the district’s price range, along with the fact that there are relatively few high-rises, made it a promising area for hotel development." 
To read more click here.

The hottest selling overseas property in 2014 in Huttons is The Bridge.

11 Reasons why The Bridge is popular amongst investors.

1. FREEHOLD
2. Guaranteed Rental Return of 18% over 3 years!
3. Extremely Affordable from only US$100K+!
4. Low Upfront Payment!
5. Staggering 45-storey high Iconic Integrated Condo with F&B, Retail n SOHO
6. 1st of Its Kind – Mixed Development – Live, Work & Play!
7. FANTASTIC PRIME LOCATION. NEAR CBD
8. Walking distance to NagaWorld, the One & Only Casino/Hotel/Shopping in Phnom Penh!
9. Near Embassy of Australia, Russia & National Assembly
10. Near Phnom Penh’s biggest mall (AEON from Japan)
11. High Demand from Expats & Yuppies with High Occupancy!

More more information click here.