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Analysis of investment advantages of five capital cities in Southeast Asia

2020-06-23
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Summary:How to invest in real estate of Southeast?

No matter it is overseas property or domestic property, regional selection is the most important, and the cities with the most active economy and the most value-preserving properties are the capitals of countries undoubtedly.

Southeast Asia is a popular area for overseas property buyers, and the capitals of various countries are the most popular cities for home buyers and the most concentrated places for foreign investment.

Due to the different development levels of various countries, the economic and cultural differences are also relatively large, and the real estate market has its own characteristics. Before buying a house, first understand the cities, analyze the investment advantages, find the positioning and demand, and buy a house accurately.

Bangkok-Thailand

Bangkok is the capital of Thailand, the largest city in Thailand, and the second largest city in Southeast Asia. It is located on the east bank of the Chao Phraya River and faces the Gulf of Siam in the south. It is the most prosperous city in the entire Indochina Peninsula.

Bangkok is Thailand's political, economic and cultural center, with GDP accounting for 44% of Thailand's total. Bangkok Port is responsible for 90% of Thailand's foreign trade. Thailand is the designated tourist country, and Bangkok is selected as the most popular tourist city in the world, with active economy.

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Real estate investment advantages: 

Bangkok has a population of more than 10 million, and has concentrated more than 80% of the affluent class in Thailand. It has a high population density and high rental needs.There are many Chinese and overseas immigrants with a high degree of internationalization. Real estate in Bangkok is very attractive to foreigners. As the second largest central city in Southeast Asia, Bangkok's solid economic foundation and comprehensive medical, educational, and living facilities make the property more valuable.

The best universities in Thailand are all gathered in Bangkok, and the world’s top 500 foreign companies basically have branches company in Bangkok. In addition to the developed tourism industry, the rental demand is thriving, and the return rate yield also very impressive to investors. A common one-bedroom apartment has a monthly rent of about 4,800-5,000 yuan and a rental return rate of about 6%. International metropolis, Bangkok Airport can fly directly to major cities around the world with convenient transportation.

Foreigners can hold apartments with freehold property rights legally, no inheritance tax, net area of apartment. The real estate market is mature and has a certain regulatory system.

Manila, Philippines

Manila is the capital of the Philippines and the largest port city in the Philippines. It is located in the west of Luzon Island, the largest island of the Philippines, on the east bank of the Manila Bay.

Manila is the economic center of the Philippines. Its GDP accounts for nearly 40% of the Philippines. It has concentrated more than half of the country’s industrial enterprises. At the same time, Manila is  an important transportation hub and trading port in the Philippines. 1/3 of the country’s exported goods and imported goods 4/5 of them are concentrated in Manila, the modern and international city.

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Real Estate investment advantages:

The economy is growing fast and the investment environment is stable.

The population is young, with an average age of about 23 years. The demographic dividend can be last for at least 40 years. The demographic dividend will promote economic development and will also generate a lot of rental demand in the future. The real estate market has great potential.

Housing prices continued to rise, and the Manila CBD condominiums price increased by 5.19% in the first quarter of 2018, and increased by 7.04%, 8.45%, 6.58%, and 6.95% in the four quarters of 2017, year-on-year. From 2012 to 2017, the average annual growth rate of housing prices at 6.6%, Manila’s rental yield is about 8%, and it has been on an upward trend in the past two years.

The current housing prices in Manila are relatively cheap compared to the capitals of other countries. There are no public area needed to be share of apartment with fine decoration and freehold property rights.

Kuala Lumpur, Malaysia

Kuala Lumpur is the capital and largest city of Malaysia. Kuala Lumpur divided into 11 municipal districts. The total population of Kuala Lumpur accounts for 5.54% of Malaysia’s total population, mainly Malays, Chinese, and Indians. The city’s foreign population accounts for more than 10%, but overall, the city’s total population is less than the population in capital city of Southeast Asia. Compared with other capital cities, Kuala Lumpur only about 1.7-1.8 million population.

Kuala Lumpur is an important international city in Southeast Asia. Tens of millions of foreign tourists visited there every year. In the November 2018 World City Ranking, Kuala Lumpur entered the ranks of the world's first-tier cities.

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Real estate investment advantages:

Affordable housing price, 15K-35K yuan per square meter, compare to first-tier cities, the price is not so expensive.

No public are are needed to be share.

The tax law is mature, the transaction is standardized, and the market control is better.

The investment environment is suitable with the high degree of internationalization.

Singapore

Singapore is located at the southern tip of Singapore Island, accounting for about 1/6 of the island's area. It is the political, economic, and cultural center of Singapore. The urban area of Singapore is also known as CBD.

Singapore has only one city, and it is composed of dozens of islands. Singapore land area is small, and there is no obvious capital division. Singapore is one of the world's largest ports and an important international financial center. It is a very important international city throughout Southeast Asia, Asia and even the world.

Singapore is the most developed city in Southeast Asia. It is a foreign trade-driven economy. It is dominated by electronics, petrochemicals, finance, shipping, and service industries. It is highly dependent on the United States, Japan, Europe, and surrounding markets. The total foreign trade is four times GDP. Long-term high-speed of economical growth. In the 2018 Global Financial Centers Index (GFCI) ranking, Singapore is the fourth largest international financial center in the world.

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Real estate investment advantages:

Developed economy, good investment environment, coupled with limited land resources, high property value.

The real estate market is mature, market supervision is in place, and it is safer to purchase housing.

The city has mature facilities, a high level of education, a good living environment and a sound system, making it a very suitable city for investment and self-occupation.

Foreigners can apply for a housing loan with high amount and low interest rate

The rental rate of return is generally higher than the interest rate, and the annual rate of return is about 3-5%.

 Phnom Penh, Cambodia

Phnom Penh is the capital of Cambodia and the political, economic, and cultural center of the country. There are more than 2.1 million locals and hundreds of thousands of foreign permanent residents. It has a high degree of internationalization and a large proportion of foreigners.

Phnom Penh has gathered a large number of foreign companies and foreign embassies. Most of the wealthy locals live in Phnom Penh.

Phnom Penh's economy is relatively diverse, and tourism, real estate, and manufacturing are all very eye-catching. Although the development level lags behind other capital cities, Phnom Penh's economic vitality in the period of rapid development cannot be underestimated.

Due to the dense population, real estate rental demand in Phnom Penh is relatively strong, and the real estate market is developing rapidly.

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Real estate investment advantages:

The emerging investment market in Southeast Asia, Phnom Penh has cheap housing prices and low barriers to invest.

A market with a loose investment environment and no foreign exchange controls, favored by foreign investors.

US dollar assets, asset preservation.

Freehold property rights, most of the projects are well decorated, there are leaseback projects, easy for investors to management. The economy is developing rapidly, and housing prices in Phnom Penh are increasing, with a rental yield of about 6.5%, and great appreciation potential.

In the early stage of urbanization, the real estate market is still in an expansion period, and there is more space for development.The population is younger and there is potential market for rigid demand.

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Disclaimer: The re-forward articles on Compass website are for the purpose of conveying more information, and it does not mean that the Compass website agrees with its views or confirms the authenticity of its content. Article noted as "Source: Compass original", please note that the source from Compass. The content of the article is for reference only and should not consider as investment advice, and it does not mean that Compass agree with its views.

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