A report by Cushman & Wakefield said that Singapore is the second most preferred outbound destination in Asia by mainland Chinese investors. The main reasons include an abundant liquidity among wealthy investors, investment institutions and developers, coupled with the currently strong renminbi. Another reason was because of the slowing real estate market back home in China. A total of US$3.23 billion was poured into Singapore’s real estate market for 2008 to June 2014. Hong Kong was top in the same period with a total of US$3.84 billion being invested. It said that despite US and UK being a favourite as it was much more matured, Southeast Asia including Malaysia is now favoured too. Within the same period, a total of US$2.07 billion was invested into Malaysia as well.
I think we can see that Southeast Asia is likely to emerge victorious in the next few years when compared to Hong Kong. The main reason I feel so is because of the better potential in terms of returns. As it is today, Hong Kong’s property market is already way too expensive for its people when compared to Singapore or Malaysia. The median house price in Hong Kong versus the median income is close to 15 times! Comparatively, Singapore is 5.1 times and Malaysia is 5.5 times. This is based on a survey by US-based Demographia. In other words, assuming a China investor has all these information, it may be more prudent and potentially more profitable to invest in Malaysia or Singapore. Besides, investing a lesser amount in Malaysia is likely to yield them landed property while in Singapore, the China investors may live in a better condition with a really nice seaview at Sentosa island.
The China property market will not suddenly rebound because even its GDP growth has slowed down to less than 7.5% in the last quarter. As its property market has cooled down way too much to the government’s liking, it has even started to warm it up via loosening measures. Read here: China Property Market Boost – All the measures. Iskandar has shown the first decrease in house price for many years last quarter. Singapore property prices has continued to be erratic. Dropping in prices for both the HDB and luxury condos but demand remain strong as shown by a few very successful launches recently. Anyway, even if more buying come from the China buyers, It would not affect both markets too much currently as the % is still considered small compared to the overall market. However, it will provide another good support to both property markets. This is why, despite being ranked second (Singapore) or even Malaysia with a significant amount recorded, both markets should be happy. 🙂
written on 20 Nov 2014
Next suggested article: China to Singapore through Malaysia with High Speed Rail. 12 hours?