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BALI

House prices in Bali rocketed during the first decade of the century. The Indonesian island recorded a year-on-year increase of 20 per cent between 2000 and 2012, reported the Financial Times. That rapid growth was a result of three key factors, said Zoe Rice of Elite Havens, the Southeast Asian property experts: the country’s expanded upper class, a booming tourism industry and the 2008 global financial crisis. “If business wasn’t going to be good for the investment bankers,” Rice said. “They decided to make a move down here.”

Yet with 70 per cent of buyers being from Indonesia and mortgages not available to foreigners, prices eventually hit saturation point. By 2018, transaction volumes across the island were substantially down compared with even three years earlier. According to Elite Havens, prices in Seminyak have been flat since 2012. One reason prices have not dropped is that “the sellers don’t want to budge”, says Polo Peronnin, a property consultant at BaliHome Property. Some homes in Seminyak are sitting on the market for between six months and a year, he adds. 

Land prices

LOMBOK

Lombok is located just 150km east of Bali yet feels like a world away. Often billed as “Bali Before the Boom” it makes for an interesting comparison. In 2007, a square-metre of land in Bali was worth US$900; 10 years later its value was US$2,250. Lombok can be reached in a half-hour, yet the price of land suggests otherwise, with a square-metre costing just $10 in 2015 and now averaging around US$75 outside the main area of Kuta Mandalika. With ongoing private and government-backed developments, that price is steadily climbing, but just how high it will go is the big question. You only need to look at its neighbour across the Bali Sea though to recognise its massive potential.

 

With such a land-to-dollar ratio, it is little surprise Lombok is becoming increasingly popular with first-time investors. More than 60 percent of all Invest Islands clients are first-time land investors, including Australians looking for retirement solutions and European expatriates keen to invest in one of the Indonesian Government’s priority destinations. One French client who purchased 2000 sqm of land in Kuta in 2017, sold it 18 months later for a 33 percent profit.

Ownership regulation

PHUKET

Phuket is another fast-growing Asian city that offers good investment opportunities. A Thai metropolis of modernity, it is filled with gyms and cafes, hip bars and restaurants, high-end shopping, and beautiful beaches. Just now there is ample housing units, but, like Lombok, it is an island so the land available is finite. Increasing tourism and lowered interest rates suggest the supply and demand dynamic will soon skew and the price of real estate will creep up. The current cost of prime beachfront locations in Phuket is already around US$1000-$1500 per square-metre and is expected to keep growing.

Main Attraction

PHU QUOC

If you feel you have missed the boat on Phuket, there is also the Vietnamese city of Phu Quoc. Located at the southern tip of Vietnam, it welcomed around two million visitors in 2017, an increase of more than 70 percent on the previous year. While traditionally popular with backpackers, a host of luxury hotels are changing the scene. With future plans to further upgrade the island’s infrastructure and high-end leisure facilities, a continued rise in tourism seems certain.

The most expensive parcel of land in Phu Quoc is located at Long Beach and costs between US$200-US$300 per square-meter. Naturally, like all investments that require somewhat of a crystal ball, buying in Phu Quoc requires due diligence, extensive research, and trust in your brokerage who will be charged with negotiating the Vietnamese red tape handled entirely by the communist party.

SEA ROI yield

CEBU

The Filipino island of Cebu has long been a prime investment location courtesy of its picturesque beaches, friendly atmosphere, and steadily increasing flow of families and backpackers. Property values have historically risen with certain areas such as the city’s business district almost doubling in price between 2010 and 2019.

 

Jonathan Macalintal, a project development consultant at local firm Santos Knight Frank, said property values are expected to increase further, especially as important infrastructure projects are implemented and Cebu sees more growth in its key sectors. Aside from strong economic growth, Cebu also boasts a stable local economy, a skilled labour force, and enhanced international connectivity with the 2018 opening of Terminal 2 at Mactan-Cebu International Airport.

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