The Malaysian Finance Ministry has expressed strong optimism in the property sector for 2010 back of bullish domestic demand. Further incentives for foreign investment are currently under review and more increased liberalization appears to be in the works.
Property developers are also seeing margins protected due to stabilization and in some cases decreases in key construction commodities. Overseas buyers are continuing to be attracted to urban areas such as Kuala Lumpur with both financing and attractive rental yields prevailing.
So far 2010 is looking to be the year of the condominium as we are barely a quarter of the way into the year and already close to 1000 units have hit the market. Next up is Phumundra The Condo.
Leading agency Plus Property is handling project sales and marketing for the 130 unit development. Located just near off the bypass intersection and Thepkassatri Road in Muang, the site takes up a little over 8 rai.
The condos are broken up in a series of 3 story resort styled blocks with a series of pools and facilities. Pricing is attractive with entry points under THB 3 million.
The latest craze of low price condos looks to be gaining new momentum as a number of cash rich Bangkok Thai listed developers have announced projects in the pipeline or land acquisitions on the island.
Phuket is seeing increasing competition in Thailand for branded resort residential with Residences at Four Seasons Resort Chiang Mai active in the market. This phase which is already completed has 5 villas, with 2 already sold. The 4 bedroom units sit on ½ rai plots with 755 square meters of built up space and are sold on either a leasehold or freehold basis. Average prices are THB 150 million.
The Residences condominium which has 24 units only has two remaining priced at approximately THB 64 million. Average unit sizes are off 500 square meters. Looking at real estate sales of 22 condos and 2 villas certainly the combination of the Four Season's brand name and unique luxury offering in Chiang Mai have added traction. Both the architect Lek Bunnag and landscape by Bill Bensley certainly have contributed to the success given their tasteful Thai design sense.
Developer Minor International continued to be active in luxury property with the St. Regis Residences Bangkok about to hit the broader market.
Here in Phuket the divide between development and those who wish the island to remain the same with growing concerns on protecting the environment and culture continues to widen. I read a recent piece by Jack Daniels from balidiscovery.com which is an intelligent comment on that other Asian destination Bali. We are reprinting it with Jack's permission:
"Changes in Land Ownership Rules Now Under Consideration May Threaten Bali's Culture and Heritage.
The Indonesian press has been awash with news of a promised change in property laws that, if approved, would allow foreign nationals to lease land for 75 years. The response to the proposed regulation has earned enthusiastic praise from the national property sector. Conceivably, the new rules would end the illegal and fraught-with-danger current procedure of placing a property in the name of a nominee Indonesian national. Meanwhile, members of the prestigious Real Estate Indonesia (REI) optimistically project that liberalized property ownership for foreigners will open a flood gate of demand for property purchases by foreigners, primarily in Jakarta and Bali.
One Bali-based property developer – who runs investment seminars as well as advertorials on Bali radio stations and print media, has even begun running advertisements heralding coming increases of 500 to 1,000% in both demand and prices for Bali real estate if the proposed new law is approved.
Unwittingly sounding what may be his darkest warning, the same developer even proudly quotes himself in one of his advertorials saying, "Bali real estate would be like Hawaii 30 years ago."
Threat or Fair Warning?
Similarities between Hawaii's property boom and what dark prospects that may lay ahead for Bali's delicate culture could hardly be more ominously stated. In the Hawaiian context, New England Calvinist missionaries arrived in Hawaii in the early 19th century, fell in love with the islands and, together with their progeny, imposed far reaching changes in the social and political structures. Chief among these were changes in the rules on private property that allowed the newcomers to take possession of huge tracts and, in some cases, entire islands. Hungry for more land, more money and more power – the Hawaiian pretenders even managed to extend their domination and overthrow the Island's traditional government in 1893. Over the ensuing decades, the native Hawaiians and their rich culture became increasingly marginalized through their disenfranchisement from their lands and cultural institutions.
The culture of the Balinese people is inextricably linked to the island's land. In fact, ancestral lands dictate the very position of every Balinese in society; where he must return for ritual prayers, where his ancestral spirits visit each year between Galangan and Kuningan, and the location for critical rites of passage. Membership in local banjars and subaks are property based, dictating both the rights and obligations of stewardship for every member of a Balinese community.
It is not an exaggeration to suggest that a Balinese without ties to the land is genuinely disenfranchised; something less than a true Balinese.
Sadly, developers salivating at the prospect of quick returns on the real estate market are both aided and abetted by Balinese who sell their land, lured at the idea of unheard sums suddenly landing in their hands. As a result, increasingly many are the stories of listless characters, idle in the local villages who, only a few years ago, held immense wealth but who are now penniless and landless; the proceeds from the sale of their ancestral land frittered away on motorcycles, cockfights and transitory high-living.
Property developers respond, insisting they are empowering the Balinese by placing hard cash in their hands in a process which is, after all, undertaken without coercion and completely at the will of the Balinese seller. And while such arguments are not without force, the practical consequence of the ongoing land rush in Bali is that land once sold by a Balinese to an "outsider" is extremely unlikely to ever return to the hands of a Balinese in some future cycle of land transactions. As island newcomers build homestead with little nuance of Balinese culture in their design and reap the financial gains of the promised 1,000% return on investment, the next generation of Balinese born without ancestral lands to inherit have nary a "hope in paradise" of possessing the financial wherewithal to purchase even a modest piece of real estate on "their" island.
A local pundit, only half-jokingly, described a future in which fast ferries would operate from Lombok to Bali carrying loads of Balinese to work as maids and houseboys in luxury villas now standing on their ancestral lands. Later in the day, those same ferries will bring troupes of professional dancers to recreate ersatz renditions of Balinese dance and music to the delight of the Island's new masters.
"Nyoman, be a dear and get me another gin and tonic."
Are such dire warning alarmist and overstated? Perhaps. In fact, we would be genuinely delighted if that proved to be the case.
At the same time, those who argue for a laisez faire approach to Bali's future development are blind to the negative impact of the many changes now taking place on the island and equally naïve to the dismal outcome that awaits wherever and whenever money is the only measure of value.
In the end, it is only the Balinese who will save their island and its magnificent culture. Governor Pastika's effort to introduce island-wide zoning and building standards offer a ray of hope that wise men with noble aims might still be heard amongst the deafening din of cash registers.
Fail to head these voices screaming in the Bali wilderness and it may mean aloha ahiahi or good night to yet another tropical island paradise."
In an unexpected move the Thai Government has extended its property tax incentive scheme for two months. The economic measures were set to expire on March 28, and had triggered a flood of transactions in the real estate market. Developers have reacted favorably to the news which is expected to spur sales volume primarily in the domestic sector.
Key property player Laguna is pairing up with agency Phuket Ocean Villas for the upcoming SMART Investment Expo in Singapore. Slated for March 26 at 27 in the Lion City's Suntec Exhibition Centre.
The strategic group is pushing sales of The Lofts at Laguna Village. With pricing points from THB 7.9 million for a one bedroom and THB 12.3 million on two bedroom units. Five year payment terms, complimentary golf membership and a guaranteed rental program of 6% for 6 years are key feature.
Hospitality led residential will be complimented by hotel management services by Outrigger should buyers opt into the scheme.
Certainly as a lead indicator it's good to see property developers start to venture abroad again to promote both the destination and the island's real estate industry as so many have stayed on the sidelines for the past 24 months.
Features Editor Nick Davies has left the Phuket Gazette. For the past two years Nick oversaw my regular column at the newpaper, and was extremely patient and helpful given my recurring tendancy for typos and often veering wildly into non property topics.
While I do remain just a property columnist and no doubt lack the finely honed acumen of a professonal journalist, the Nick's of the world indeed help on a continued journey of learning and improving. Happy trails Nick.
Given the surge in Asia's property markets Singapore is experiencing a phenomenon with CBD (central business district) properties being converted into luxury residential back of continued demand.
In a growing urbanization of real estate older commercial properties which seen seen rents falling are now being redeveloped into upscale homes to tap into a ramped up market. As the city state continues to develop critical mass for project such as the Marina Bay Financial district, this creates vacancy rates in aging building which forces developers to shift business models.
While during the recent GFC (global financial crises) many institutional investors flocked to steady yield income investments and stabilized returns such as commercial; the property demand remains an increasingly attractive high profit proposition.
Despite warnings in Hong Kong, China and elsewhere of a new property bubble for now residential property remains the flavor of the moment.
Duncan Worthington, Managing Editor of Ensign Media who publish what has becoming the Bible for real estate developers Property Report Thailand will leave the organization on March 18th. Co-founder Terry Blackburn will assume his duties. Recently the publication appointed a new Features Editor Andrew Batt.
Indeed Duncan has been an important catalyst for the industry over the past 7 years, leading innovations such as the Annual Thailand Property Awards. As for future plans he's going to be catching up on his golf game while looking at new opportunities on the horizon.
