Asian dragons
Want to know where the top five hottest places to buy in Asia are right now? Luke Ng, chief executive officer of Century 21, presents his recommendations to Helen Dalley.
"Investors are advised to look to countries offering stability, sound infrastructure, a solid economic track record and rich potential for financial development."
Experts may be predicting that Asia’s property markets are about to be hit by high inflation and that high interest rates are likely to follow, but realtors like Luke Ng, chief executive officer of Century 21 and director of Singapore Holdings Pte Ltd, remain positive. Investors are advised to look to countries offering stability, sound infrastructure, a solid economic track record and rich potential for financial development.
So where are these investment hotspots? “Taiwan, particularly Taipei, is definitely a place that would-be investors should consider at the moment,” says Ng. The market has done well since 2005, and it’s further sprung to life in 2008 – it’s active with a pretty stable price and a lot of local demand.
Since 2002, the market has increased by 50 percent, and it’s still relatively cheap compared to other major cities in Asia. As Ng says, “You can buy a luxury property in the Xinyi area, near to the Taipei 101 building for between HK$7,000 and HK$8,000 per square foot, which is still very cheap compared to Hong Kong.”
Ng points to the arrival of the new Taiwanese president, Ma Ying-jeou, who is keen to strengthen relations with the mainland Chinese government and push business development as another reason Taiwan is now ripe for investment.
Aside from the Taiwanese capital, another sure-fire bet is Taiwan’s third biggest city, Taichung, which lies to the south-west of Taipei. “The High Speed Rail service has cut travelling times down significantly, and from Taipei to Taichung, it now takes less than an hour, instead of three hours. This makes the city almost a suburb of Taipei,” says Ng. “People can now work in the capital and live in Taichung, which was not possible before.”
Even though the price of land has doubled in recent years due to the arrival of the new rail link, property prices are still one third of those in Taipei. “At the high end of the market, you are looking at around HK$3,000 per square foot, although cheaper properties are available,” Ng explains.
The second place Ng is keen to recommend to local investors is Singapore. “The property market in Singapore has been very buoyant over the last few years, and I think this will continue, partly due to the arrival of two integrated resorts and casinos in 2010, first Marina Bay Sands, then Resorts World Sentosa. Aside from that, the Singapore economy is in pretty good shape, plus it’s a regional financial centre for ASEAN countries, and a hub for medical, educational and recreational facilities in Asia.”
Are there any districts that are particularly worth considering at the moment? “The area close to Marina Bay is somewhere you can still find reasonably priced properties, as is the east coast; here you can find condominiums for around HK$5,000 per square foot, and there are many new condos being built in this area. It’s close to both the airport and the highway, and will have its own underground station soon,” Ng adds.
Ng says long-term investors must consider Tokyo, as it offers yields of up to 6 percent – but don’t expect to snap up a bargain in glitzy Ginza or expat-favourite Roppongi Hills, as these areas are still famously expensive. “A good area to invest in at the moment is Ueno, a district in Tokyo’s Taito Ward. It may not be in the hub of the city, but it has good transport links to the sky train and airport, and these apartments are easy to rent to locals. You can pick up a property for between HK$2,000 and HK$3,000 per square foot,” says Ng. “Another up-and-coming area is the Tokyo Bay area, where properties come in at around the same price as they do in Ueno.”
According to Ng, China is still a hot property, particularly Shanghai. “At around HK$7,000 and HK$8,000 per square foot, it’s no longer cheap, but Shanghai is a financial centre that continues to command a lot of regional and international interest. It has a good rental market, with yields of up to 6 percent. If you can afford it, the Bund is still the best area to buy, but in the east of the city, Pudong, where a lot of multinational corporations have offices, also looks good. Properties start at around HK$5,000 per square foot and go up to HK$10,000.”
Finally, Ng says the Hong Kong property market is still “pretty healthy”, so far as investment goes, and there are bargains available. “You can buy somewhere close to Tung Chung, which has a good transportation network, for HK$4,000 per square foot.” And anywhere close to Central, “even if it’s only one room, and is less than 500 square foot, will command returns of around 4 percent to 5 percent”.
Ng also rates Sai Kung as a bargain. “Investors can find apartments for HK$6,000 per square foot, with lots of space and a good yield.” Long-term investors should, he says, look further north to Fairview Park in the New Territories. “Fairview costs around HK$6,000 square foot, which is much cheaper than Shenzhen; in the long term, it has very good potential.”
Ng is also excited about the Kowloon market, noting that several merchant banks, including Morgan Stanley, Credit Suisse and Deutsche Bank, have already announced their plans to set up in the International Commerce Centre. “The properties situated on top of Kowloon Station such as The HarbourView Place are 20 percent to 30 percent cheaper than their counterparts in Central so of course, it’s definitely worthy of investigation.”
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