Making the Big Bucks in Asia:
2020 Key Property Investment Trends
Winning in the property market requires a balance of caution, calculated risk-taking, and some say a spot of luck. Given the past eventful year, we can see the rules of the game being tested across the board as we see great power shifts on a global scale.
Social unrest in Hong Kong since June 2019. China-US trade war. Brexit. Rising troubles in the Middle East and subsequent rush on gold investment. As the impacts from these events emerge, we see investors who are more risk-averse quietly moving their assets and diversifying their investment profiles around the world and around Asia, while others who “find opportunities in adverse times” (an old Chinese saying) have, on the other hand, found that the testy dips and cool downs in the Hong Kong and international markets offer them a golden opportunity of investing in quality properties at a preferred discount. The winning formula is one that caters to each investor’s risk profile and investing in accordance with actual market needs and demands.
This article offers up-to-date insights into market trends as well as a global strategy outlook at the international property market for 2020.
Market insights: Why smart investment in the property market can still be lucrative and remains the preferred choice despite the trying times
Future of work
The global concept of work has evolved greatly with the advancement of mobile technologies and an increasingly geographically mobile workforce. This brings forth many new ideas and business models that are more in line with the preferences and needs of the new generations. Workforce management is therefore also increasingly mobile, following lower international travel costs, regional oversight of projects, as well as a decreasing reliance on the geographically bound concept of “office-based”. We see these as factors that have greatly impacted upon international commercial property demand and trends, and at the same time, the ever-rising home-based and office-less mobile working trends and arrangements should be closely watched for residential property investors as well, so as to better cater to the needs of their future tenants and development.
The new generations coming into working age have updated their living and working preferences to reflect their values, showing a greater propensity to rent homes and share space, a more relaxed approach to ownership, as well as a generational emphasis on the value of “just-in-time” usership.
Increasing international mobility and identity
The lowered costs of international travel have given birth to an age of the global citizen as well as a lessened attachment to any single city in particular, which contributes to the increasing mobile concept of “roots”. This is especially true for millennials as they are trained from a young age to travel around the world for study, short-term work experiences, and “working holidays”, before they start at a job that they are interested in, in any corner of the world that appeals to them.
Popular international trends for investment: How a smart investment strategy helps you optimise your local and overseas property investments
Part I: Hong Kong & Asia
As ever, the active Hong Kong property market is split into luxury homes versus small start-up apartments. Despite the social environment, we still see a heavy emphasis by developers on luxury homes against the limited land supply by the government, as they can make a greater profit per square foot and in the surrounding commercial development, while catering to the wealthy international and mainland Chinese investors who cross the border to purchase these properties. The market remains observant to gauge investors’ appetite, with each new development up for sale and pre-sale. 2020 will likely see Hong Kong recovering from the 7-month dip and cool-down from the latter half of 2019, while demand remains steady.
Hong Kong’s nearest capital city in friendly Taiwan is growing in popularity in tourism and increasingly as a destination for living, especially in the “silver-hair” communities as well as the younger, upwardly mobile millennials who care more and more about the quality of life. The low costs of living, emigration, properties, and study and relaxed, cultural vibe of Taiwan are highly attractive to those who find Hong Kong’s fast city pace tough to keep up with.
Properties are less expensive than Hong Kong, there is a bonus of being able to see, hear and use the Chinese language daily, and citizens enjoy greater general and social welfare (especially with regards to healthcare): no wonder Taiwan is increasingly popular as a “sustainable living” destination.
Tokyo remains an evergreen and well-developed international hub for tourism, commerce, and investment. Despite the largely stagnant economic growth since the 80’s and a serious long-term aging population issue, the city’s ever rising demand for quality properties drives investments in the expensive Japanese capital.
This mature international financial centre offers compact comfort and style at a notoriously steep cost – this is generally considered a more high-end investment destination and we have seen investors who are interested in the high-life purchase the trendy city centre apartments in hi-tech high rises despite the global slowdown, indicating that the demand is still present for those who can afford it.
For millennials who speak the language, this offers them a precious opportunity at exploring a deeply traditional working culture where new technologies and exciting commercial opportunities have arisen. Though working hours are famously long, some enjoy the more traditional and community-based way of life, as wives and mothers often remain at home to take care of the family, especially in the suburbs and beyond.
It is worth noting that there is a move towards investments in the smaller towns around Japan, even as far as Okinawa, for an alternative, slower-paced life and lower living costs than city dwelling. These tend to be at a lower cost in more rural and small-town areas, and perhaps more comparable with investments in Taiwan.
Singapore’s rise as an economic centre and city state power in Asia has been meteoric and impressive to witness over the past 20 years. The clean streets and safe environment, largely English-speaking postcolonial communities, multicultural co-existence governed by a strong state, all attract those who seek a more stable life in the tropics.
Singapore’s strong commercial development and influence in the ASEAN region position the city as a prime investment destination where quality properties are purchased for investment as well as for families seeking to emigrate to the city state either now or in the near future.
Despite the slower growth in its GDP in 2019 (+0.7%), with its investment in technologies and infrastructure, all eyes will remain on Singapore in the year 2020 and beyond.
Malaysia (Kuala Lumpur, Penang, and many regional smaller cities such as Johor)
Singapore’s neighbour across the Strait enjoys vast natural resources and a landscape that offers investors excitement in its bustling capital city KL, relaxation up in the mountains in world-renowned spas and casino resorts, and convenience for those who need to travel to neighbouring cosmopolitan Singapore.
Properties are available at a considerably lower price than Singapore and Hong Kong, offer much larger space for families, and are increasingly popular as the country’s economic link to Singapore strengthens.
Malaysia’s emigration laws allow investors to purchase a global second home and there is an ever-growing industry of advisors and agents who cater to the increasing demand for this service.
A similar story to Malaysia, Thailand offers excitement and growing global demand for its glitzy, cosmopolitan, yet very affordable properties in its capital city Bangkok and star tourism cities, vast natural resources and space, as well as an ASEAN-led economic and infrastructure development, and support from the UN Asian headquarters within her borders.
2020 sees Thailand activating her Northern ASEAN links with Vietnam and other neighbouring countries to mobilise investments and infrastructure development, offering an enticing choice for investors looking to diversify their investments.
Note: For “Part II: International destinations further and beyond”, follow us and see our next blog for our take on the most up-to-date analysis on international property investment trends in Australia, UK, Europe, and Northern America!
As we can see from our multidimensional data-driven analysis, smart investors are still applying the risk:reward formula and calculating and reaching the best investment returns in these trying times and testy waters, based on actual market needs and demands. As we prepare for a better, more fruitful decade ahead, it is useful to note that with the advanced tools available at hand, we can make much more effective, results-driven investments that are systematic, analytical, and empowered by technology, rather than be driven by market hype and fears.
Property Raptor is the best-in-class real estate software that offers mobile property management, backed by advanced AI-matching via advanced algorithms and machine learning. Make the most of your investments and be able to visualise and manage all your properties on our customisable dashboards now. You’ll love it and never go back to checking multiple outdated systems. Go on, catch up, it’s 2020 already! The future is here, it’s time you enjoyed it.
Have a happy, prosperous new year! Make it big with Property Raptor in 2020 and beyond.
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