Premium Lifestyle Properties – South East Asia
A good all-year round climate, shared language and similar culture and of course great food have helped to make Singapore and Malaysia two hotspots for China's elite looking for a second home overseas. But as China 's super-wealthy develop a taste for the lavish lifestyle of their European peers, Thailand and Indonesia are hoping to entice them to new premium lifestyle developments, exclusively aimed at high-net worth individuals who crave the super-luxury lifestyle and can afford it.
The concept of Lifestyle Investments has been simmering for the past few years and has now become a buzz word in investment circles. It is basically a property investment in an exotic location like Thailand's Phuket or Indonesia's Bali whereby you can enjoy a return on investment whilst at the same time enjoy all the benefits that living or regularly holidaying in one of these places has to offer.
The latest trend for Asia's mega-wealthy is the marina-based life style, typified by Royal Phuket Marina, on Thailand 's Phuket island. An exclusive complex of residential waterfront properties it is designed a second home for millionaire playboys and playgirls where they can moor their private yacht, pick up the latest designer watch or French designer swimwear at high-end boutiques and enjoy fine dining and trendy bars.
Stressed out executives and rich entrepreneurs from across Asia are increasingly opting for this marina-based lifestyle as both a reward at the end of a hard weeks work and antidote to the stresses of executive life. Usually in their 40's they tend to purchase premium properties for use at weekends and for holidays, happily admiring their yachts while sitting in their rooftop Jacuzzis sipping Champagne. Although people purchase these types of properties with one eye on retirement, marina property values are currently rising rapidly, so selling up before retirement can be a tempting and profitable option.
Although Thai/Indonesian marina fever has yet to hit China , with more and more marina-style residences and exclusive properties currently under construction, the developers are beginning to take steps to show China 's wealthy what's on offer. Thai real estate companies, such as Indigo Real Estate which includes Royal Phuket Marina residences on its books, are actively working in China to introduce the nations elite to the idea of premium property lifestyle. Jasmine Nya, head of Indigo's Hong Kong office is convinced that the only reason that China's wealthy haven't snapped up these properties like their Hong Kong and European peers is that they simply don't know about them.
While, new contenders vie for Chinese attention, let's not forget about the old favourites. Both Malaysia and Singapore are still popular places to have a luxury second home.
Spotting a trend almost 20 years ago of foreign tourist falling in love with Malaysia and wishing to stay, the Malaysian government developed the ‘Silver Haired Programme' to encourage foreigners to relocate and retire there. Now rebranded and repackaged as ‘Malaysia, my second home', the program offers participants a 10 year renewable visa, plus a benefits package which enables you to invest in Malaysian owned assets, purchase property without the lengthy FIC approval process, apply for mortgages from local banks and you can even import your car duty-free.
KP Fong, a spokesperson for Tourism Malaysia explains, “It's usually rich business people that have worked hard and made their fortune in their own country, they look around and want to buy a second home where they can relax and retire” he explains.
“The Chinese like Malaysia because we have similar cultures, they tend to be accepted into society easily and can assimilate quickly.”
To qualify for the programme, applicants with spouses can choose either to have a fixed deposit of RM150,000 in a local Malaysian Bank or derive a fixed monthly income of not less than RM10,000, for individuals the threshold is slightly lower.
Last year alone, more than 700 foreigners registered with the programme, the majority being wealthy Chinese, followed by Singaporeans and the British.
Singapore has also taken various steps to attract wealthy foreigners to relocate. Edmund Chua , Singapore Tourism Board's Regional Director for Greater China says, “When a country becomes rich, its rich people turn their eyes overseas for holiday properties. Singapore becomes a good choice for wealthy Chinese. Sentosa is Singapore 's great holiday resort island, yet only 15 minutes from the city center. So it has become a popular location with the wealthy Chinese.”
Chua also points out that many Chinese entrepreneurs now choose to send their children to Singapore to study, ensuring their offspring will receive a bi-lingual education. “Richer families would usually buy an apartment, so that their accompanying mothers can take better care of their children” he explains.
According to David Chong, who advises China 's wealthy on how to manage their assets, now is a good time to invest in a Singapore property with property prices still much cheaper than in Hong Kong . “There will be a boom in property prices in Singapore in the next few years caused by a growth of rich Chinese and Indians looking around for somewhere to park their money”, he predicts. Chong points to properties at Sabana Cove on Sentosa Island , which have already doubled in price and changed hands. “Particularly since the government granted approval for the casinos” he laughs, “the integrated resort on Sentosa Island is very close to Sabana Cove.” Many new projects such as the St. Regis development are so popular purchase is by invitation only.
Regardless of the location or offering it goes without saying that not all investment in second homes deliver on the returns the delivers may promise, so it's vital to get good advice so that your dream investment does not turn into a nightmare. In the meantime see our quick overview of the laws for foreigner wishing to purchases property in South East Asia .
The legal basics
Malaysia
Foreign buyers can buy freehold property in their own names but the Malaysian Foreign Investment Committee and the relevant state authorities must approve the purchase. However, participants in the ‘ Malaysia , my second home' program, who are required to keep a minimum level of assets in the country are exempt from having to get FIC approval.
Singapore
Under legal changes made in 2004, foreigners with assets of at least $12.2 million can apply for residency if they place $3.1 million in a financial institution in Singapore . Those applying for residency can use more than $1.2 million of the $3.1 million to buy property in a government-backed resort-style residential development on Singapore 's Sentosa Island . New residents are entitled to take advantage of Singapore 's income-tax rate of about 20 percent.
Indonesia
Foreigners can get 25 year leases. Another option is to purchase free-hold through an Indonesian citizen but lawyers advise that this can leave you on tricky legal footing as the agreement often depends on good faith.
Thailand
Foreigners can get 30 year leases, developers often structure the leases with options to renew. Strata titles are also an option on properties registered as condominiums. Freehold ownership can be obtained by setting up a Thai company whose name the property is registered in. The company must be Thai-owned but will have a share structure that allows the foreign owner control of the property.
Philippines
Foreigners can't own land but developers often register vacation homes as condominiums, allowing foreigners to own strata titles. Leasing is another option, you can also opt to purchase through a company that is 60% Filipino owned.
