Property consultant predicts there will be a big wave of investments into ASEAN soon bringing unprecedented opportunities in the fast-growing region.
“My forecast is that the emerging ASEAN real estate market will have an ‘unbelievable’ boom soon as a big wave of investments pour into the region,” says Dato’ Sri Gavin Tee, President of Swhengtee International Investment Alliance. “Already, there are a number of huge infrastructure and property development projects straddling the entire ASEAN landscape. More tellingly, Foreign Direct Investments (FDIs) into 5 ASEAN countries (Singapore, Indonesia,
Dato’ Sri Gavin Tee,
Founder and President of Swhengtee International Investment Alliance
Philippines, Malaysia and Thailand) have already exceeded FDIs to China,” he reveals. Tee was speaking at the International Realtors Conference and Regional Leadership Summit held in Manila recently.
“For the past 50 years, ASEAN has not been very integrated -it’s very diversified with different cultures, languages, business systems, etc. For example, a Malaysian going to another ASEAN country like Myanmar would feel as if he’s landed in a totally foreign country but instead would feel more comfortable visiting the US, the UK or China.
But now with AEC (ASEAN Economic Community) just around the corner and China’s vast investments in every ASEAN country, as well as the region being swept up into the globalisation momentum, the region is poised for rapid growth bringing with it unprecedented opportunities, says the property consultant.
“It appears like the growth is very sudden and rapid; that’s because it was not too long ago that many ASEAN countries had no cross-border policies and participation, in part due to government control and cultural traditions. But now, we are seeing all ASEAN nations opening up to foreign participation and development as AEC nears. AEC will certainly change the playing field in the global market,” Tee observes, adding: “The situation is reminiscent of China where for hundreds of years, it has practised a closed-door policy. Upon opening up its economy to foreign participation and liberalising its domestic property ownership laws, it experienced unprecedented growth and change, impacting the whole world tremendously. The effects of China’s market-opening policies are still reverberating around the world today. In addition, China’s Silk Road policy, more popularly known as ‘One Belt, One Road’ linking it to the West via a planned network of overland road and rail routes, oil and natural gas pipelines, and other infrastructure projects, as well as the Pan-Asian Railway linking it to ASEAN, will further spread its influence across the northern hemisphere.”
This phenomenon is not just confined to Asian countries; Brazil and Dubai experienced similar growth pattern when they opened up their economies.
In the case of ASEAN, increased urbanisation and a young population are creating a middle class population with big spending power as well as a penchant for international travel and goods. This group of consumers is increasingly demanding international standards in some items they buy, including real estate. Coupled with the wave of globalisation, real estate in ASEAN is anticipated to become internationalised in due course. And as cities in ASEAN become more globalised, costs in general will likewise move higher towards a regional standard.
Among the countries bucking this trend is an underrated gem, Malaysia, which is currently underperforming most other markets in Asia in terms of its share market and currency. But it is precisely because of this that costs in Malaysia are still low compared to its ASEAN neighbours. This has resulted in the country remaining a low-cost destination with many relatively affordable properties.
“Malaysia has huge potential despite its current troubles,” stresses Tee, who is based in Kuala Lumpur. He adds: “Opportunities there are aplenty but the window of opportunity may not be forever.”