Southeast Asia Real Estate On the Rise

Recent industry reports have shown that investors in Hong Kong are focusing on real estate in Southeast Asia. Demand for investment properties remains strong in the sector, with transactions climbing 19% each year to approximately $61 billion in the first half of 2017.

“Bangkok’s property prices are just about a quarter of Hong Kong’s,” explains Gordon Cheung, an investor who recently purchased a property in new project Life Asoke Rama 9 in Bangkok. “The location is also great, at the heart of Bangkok’s central business district near the Chinese embassy,” he added.

AP (Thailand) and Mitsubishi Estate Group’s development, which has 154 units for Hong Kong investors, sold more than 95% in its first two days on the market.

According to Vittakarn Chandavimol, AP’s chief condominium officer, “foreign buyers of Thai properties mostly want a stable rental income, unlike those who buy properties in Western countries for their Children’s education. Average rental yield of Bangkok’s property is 5.15 per cent. As only 49 per cent of flats can be sold to foreign buyers, the supply to each market is limited.”

Chandavimol explained the difficulties in breaking in the Chinese market. “Chinese citizens are limited to exporting $50,000 per person, per year. But buyers can split payments, not to mention the fact that a lot of flats are cheaper than that. Prices of high-floor studios on this project start at HK$670,000.”

“Despite capital controls, we expect continued Chinese interest in APAC gateway cities in the near term,” he said. “Thereafter we foresee material Chinese investment in Belt and Road markets in Southeast Asia. This should be a long-term trend.”

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