Investing in overseas property is one of the biggest decisions that many foreigners make.
Before you prepare for success, it’s important that you understand your overseas market, what ownership regulations that apply, if you can easily transfer your money out of the country, what taxes that apply, and more.
To give you a helping hand, I decided to write this article, where I give you my own personal reflections, backed by data.
Let’s review the 4 best countries to buy real estate in Asia.
In this article, I don’t only take yields into consideration, or target investors with a high risk appetite. I also take property taxes, land ownership regulations, capital controls and the easiness to get long term visas into my assessment.
This article is not for people who look for investment properties merely.
Market cycles, and where countries stand right now, is also of importance, of course. Many news channels and experts say that Singapore, Indonesia and India looks promising at the moment.
The Singaporean market has seen a downturn in the past years, and has started to recover. India is getting increasingly more interesting, as it grows fast economically, while Indonesia follows a similar path, with much investment in infrastructure.
4. The Philippines
The Philippines is, together with Cambodia and Vietnam, one of the fastest growing countries in Asia. With a growing middle class, favorable demographics, and an English speaking low cost workforce, more and more corporations and investors turn to this country.
Yields are fairly high, averaging at 4.3% in Manila, according to Savills, but not reaching levels as of Vietnam and Indonesia, for example.
Other sources, like Collier’s, claims that yields average at 5.3% for luxury properties in the capital, which is a bit more impressive.
Philippines qualifies into a 4th place in our list, mainly thanks to a low stamp duty and capital gains tax, and fairly high rental yields.
Not to forget, in case you’re aged above 35, you can also apply for a long term visa, referred to as SRRV (Special Resident Retiree’s Visa).
Unfortunately, real estate investments don’t qualify to grant you a SIRV visa (Special Investor’s Resident Visa), which would be appreciated among younger investors.
Two reasons why Philippines don’t qualify higher is mainly due to that foreigners can’t own land and that capital controls are strict.
Vietnam is one of the fastest growing countries in the world and opened up very recently, in 2015 to be more precise.
With much investment in infrastructure planned, like the MRTs in Hanoi and Ho Chi Minh City, Vietnam is truly an interesting spot when it comes to investing in real estate. Investing in this developing market, especially in bigger cities where infrastructural investment is planned, can give you a great capital appreciation and yield.
Another benefit is its favorable demographics, with 50% of the population being under the age of 30. The population is one of a few in the region that will actually increase, from around 95 million to 120 million, until 2040.
As more people get urbanized, and with an increasing population, we will naturally see a bigger middle class and a higher demand for property.
The tourism industry is less developed than the one we see in Thailand and the Philippines, for example, but grows with an impressive pace.
So why is Vietnam ranking number 3 on this list?
In addition to the above mentioned points, Vietnam’s yields are highest in Asia at the moment, averaging at 7.5% in Hanoi and at 5.7% in Ho Chi Minh City.
Thailand is undoubtedly one of the most popular countries when foreigners look for properties overseas. Personally, I have Thailand as one of my favorite choices. Because of immensely good yields? No, because of personal reasons.
Even if yields hover around 4%, and worse than those in places like Ho Chi Minh City, Bangkok and many other places in Thailand are way more internationalized and more convenient to foreigners. You’ll find bigger expat communities and it’s generally easier to ‘get around’.
Taxes are fairly low and rental yields comparatively okay, as mentioned. The main reasons why Thailand doesn’t qualify to the top spot in this article is mainly due to restrictions of land ownership and strict capital controls.
Long term investment visas
On the other side, one of the reasons why Thailand ranks high in this article is thanks to its investment visa.
Yes, you can buy property in Thailand and get a visa which allows you to stay for an indefinite time period. The minimum investment needed is THB 10 million (around USD 280,000).
Other long term visas available include the Elite Visa and a retirement visa.
The Elite Visa will set you back THB 500,000, and cannot be used for any investment. The retirement visa, on the other hand, requires that you’re at least 50 years old.
It’s hard to talk negatively about Malaysia’s approach to foreigners, in terms of real estate investments. Sure, Malaysia has minimum investment requirements, which differ between states, generally starting at RM 1,000,000 (around USD 220,000 – 230,000), but this is basically the only drawback.
Yields are also comparatively good, averaging at around 4-5%.
One main benefit is also that you have no particular issues to buy and own any kind of property types.
In fact, Malaysia is one of a few countries that grant foreigners freehold ownership of land. There are a few land types, like agricultural land and Malay reserved land which are not available, but you still have many land types to choose among, for example:
- Vacant land
- Residential land
- Commercial land
The long term visa – MM2H
Another benefit of buying real estate in Malaysia is that you can get a 10 year visa, called MM2H (Malaysia My 2nd Home). Thanks to the MM2H visa program, Malaysia has managed to attract a vast amount of investors from countries like China, Korea, Japan and Western nations.
To qualify for the MM2H, basically you need to prove a net income of at least RM 10,000 / month, and liquid assets of at least RM 350,000 (RM 500,000 if you’re under 50 years old).
When approved, you’ll need to deposit at least RM 150,000 in a local bank account (RM 300,000 in case you’re under 50 years old).
Points of interest include Kuala Lumpur, Johor Bahru, Penang, Ipoh, Kota Kinabalu and Melaka.