Demand set to increase in key Southeast Asian real estate markets in 2017
Media Release-7th February 2017
Penang, Malaysia. Developers from China, Indonesia, Thailand and the Philippines are expected to reinvigorate the Malaysian property market in 2017, expatriate Filipino workers will drive real estate in the Philippines, and anti-corruption measures in Indonesia will boost that nation’s market, according to leading real estate group Raine & Horne.
“About 47% of the population of Malaysia, or 14.3 million people, are aged between 20 and 49,
and these people are seeking to buy their first homes,” said Michael Geh, a senior partner at Raine & Horne International Zaki + Partners.
“Therefore, the demand for starter homes will be high in 2017, yet Bank Negara Malaysia is expected to maintain its strict credit rulings because of Malaysia’s high household debts.
“The government’s Perumahan Rakyat 1Malaysia (PR1MA) units and affordable housing built by private developers have only seen a 50% take-up, because many potential homebuyers were unable to obtain housing loans.
“We expect to see international developers coming into the Malaysian market to take advantage of PR1MA, and we will see mergers and acquisitions among local developers,” said Mr Geh.
Families of the 2.4 million Filipinos working overseas are expected to drive demand for real estate in the Philippines, said Mr Geh.
“These overseas workers earn monthly salaries of US$1,800 to US$3,000. Each month, they send money back to their families, who then invest it in property,” said Mr Geh.
This strong demand for housing has forged a robust construction and housing boom in the Philippines.
The Indonesian government’s efforts to rid the country of corruption are having a major impact on the nation’s real estate markets.
“In the past 10 years, Indonesia’s Corruption Eradication Commission has created more transparency at the federal and provincial government levels,” said Mr Geh.
In addition, a broad tax amnesty has seen huge amounts of cash being pumped back into Indonesia from the Singapore banking system and other offshore tax havens.
“This cash is being converted into property assets by investors searching for yields and returns. Thus, 2017 will be a boom year for the property industry in Indonesia,” said Mr Geh.
“New laws are expected to be introduced this year allowing foreigners to take up ‘30 years plus 30 years’ of leasehold stratified properties such as condos and apartments in certain locations.
“The government has also launched a campaign to invite international investors to Indonesia. It wants investors to live, work and set up businesses there,” said Mr Geh.
Entrepreneurs and industrialists are attracted to Indonesia because of its large population (257 million).
“Over the last decade, many Singapore government-linked companies such as Keppel Land Ltd and CapitaLand Ltd have purchased prime buildings in Jakarta,” said Mr Geh.
“They have also entered into joint ventures with local landowners and property developers to build over 20 large developments all over Indonesia.”
Michael Geh is senior partner of Raine & Horne International Zaki + Partners Sdn Bhd. He is a board member of FIABCI International Real Estate Federation and vice-president of its Malaysian chapter.
For further media information contact:
Michael Geh, senior partner of Raine & Horne International Zaki + Partners on (insert number)
Nic Atkinson, Communications Coordinator, Raine & Horne on 02 9258 5400