OVERVIEW OF ASIA FOR GLOBAL PROPERTY INVESTORS (PART1) ZIV MAGEN
The worst thing about Singapore is that it’s just so darn small. Not only is it a single city – although a huge
and diverse one at that – but it is also strictly controlled. Over 82 percent of the property market, at last count,
is government regulated community flats and houses, on lease from the government for various periods of
time. This property cannot be purchased for free-hold or even for lease-hold purposes by non-residents. The
remaining 18 or so percent, however, has been appreciating fantastically over the years, achieving stellar
capital growth, while at the same time successfully navigating, at least so far, the pitfalls of property bubbles,
rich-poor gaps (see more on that when we discuss Hong-Kong, below), poverty, and/or speculation through a
mix of financial independence, clever cooling measures imposed at the right times, in advance of any such
bubbles forming, and wise, corruption-free governance. The downside of that, however, is that like in any
such market, monthly yields are paltry.
2. China
China, aside from being the largest
country in the world by population,
second-largest
by
nominal
economy
factors, and third-largest geographically, is
also virgin land as far as international
property ownership is concerned. Private
(lease-hold based) ownership has only
been allowed a dozen or so years ago, and
and since then, the world’s been going crazy over the prospects – and for good reasons. The vast size and
diversity of the country mean great potential for growth, monthly returns and various creative, speculative
plays. However, there are more than a few caveats attached to this equation:
1.
Being a communist country, the ruling party can and does change its policies at will, sometimes virtually
overnight. While the last two years have seen a relative stability with the change of top brass party
leaders and an outspoken intention to become more globalized, this is still a very much closed, alien
environment to most foreigners, in every sense of the word.
2.
Corruption, while a top priority challenge officially being tackled on a daily basis, is still very much
rampant in local governments and their big money connections – even more so in regional municipalities
and their representatives. Land-grabs, mostly in rural areas, but also on the outskirts of large cities, are a
common occurrence and have been a major cause for civil unrest within China’s borders – with
foreigners, recourse options, by default, are severely limited.