Can’t afford a home in western countries?
If owning a home in western countries is financially challenging, Buy a home in SE Asia may offer a more affordable alternative. The region offers a range of properties at prices significantly lower than those in Western markets.
In my home country of Australia, one in six baby boomers do not own their own home. They rent. Generation X statistics are even slightly worse. And with the rapid rise in property prices and rental costs many of those are doing it tough.
So, what options do they have? Keep running on the same old treadmill? Or perhaps weigh up the option to buy a home in SE Asia? After all, what you can’t afford back home may be affordable in SE Asia.
Why Buy Property in SE Asia?
Whether it’s your own home, a holiday home or pure investment, these are some of the benefits of purchasing property in SE Asia:
- Affordable prices: Real estate in SE Asia is cheap compared to Western countries. Simple!
- High rental yields: Many places in SE Asia offer rental yields between 4% to as high as 10%. There is strong demand for rentals which are driven by tourism, growing expat communities and strong economic growth expanding the economic base and financial prosperity of the local people.
- Increasing economic development: As mentioned in the previous point, many countries in SE Asia are growing fast economically. This leads to increased demand for real estate as the ability to afford higher valued property increases for the local population.
- Tourism and expat demand: There’s no denying the explosion in international tourism. It’s never been so cheap to travel around the world. And there is an increasing number of the world’s population gaining the financial ability to travel. And that’s exactly what they are doing. Many people who purchase a condo in high tourism areas can rent them out for either short- or long-term stays.
Then there is the increasing number of people making SE Asia their long-term home – which is made easy by most SE Asian countries providing long term retirement visas. This market is expected to grow exponentially over the next 5-10-15 years. - Favorable tax policies and low property costs: Many countries in SE Asia offer low property taxes and may offer incentives for foreign investors.In addition, property costs such as rates, strata fees, utilities etc are usually far cheaper than in western countries, making property ownership in SE Asia far more affordable even if you are on a budget.
Resort-style living is popular in SE Asia.
Many people feel that it is difficult to own a home in SE Asia, but that’s far from the truth. You just need to understand the legal framework and local regulations – which is no different than back home really, where you have professionals guiding you through the process.
But there are some simple rules that each country has in relation as to what foreigners can and can’t do regarding property ownership that are worth knowing up front.
Why not lease a nipa hut in the Philippines for up to 50 years…
What Homes can foreigners buy in SE Asia?
Let’s keep it simple – the basics are as follows:
- Thailand: Foreigners can own strata (condos/units) outright. Up to 49% of condos/units in any given building can be owned directly by a foreigner. Foreigners cannot own land (hence houses, villas, townhouse etc) directly but can lease for long term – 30++ years.
- Indonesia: Foreigners cannot own property period! However, we can lease property for ‘up to’ 80 years with the same ownership conditions as if we owned it ourselves.
- Malaysia: Foreigners can own freehold strata AND land. Malaysia imposes minimum property values that foreigners must purchase though – which is not onerous compared to western nations.
- Cambodia: We can own strata above the ground floor, but again, not land. Anything landed will need to be leased in the long term.
- Philippines: Again, we can own strata – up to 40% of units/condos in a building may be foreign owned. And again, no ownership of land is allowed – must be leased long term (up to 50 years).
- Vietnam: You’ll see a similar theme here – we can own strata outright in ‘designated’ buildings, but no land – which can be leased up to 50 years.
I would say by far foreigners mostly go for condos in my experience. It’s easy, can own freehold, can lock and leave, more security and usually comes with resort style living grounds – a big pool is a must for me in the tropics and the usual manicured gardens provides a nice feel.
Except in Bali where long-term leasing villas seem to be more the rage over condo leasing (Indonesia being the only country condos can’t be owned outright).
Whether you wish to purchase and own outright a condo or enter a long-term lease on landed property is up to you. Each to their own and will be dictated by your specific needs. Both options are popular. And remember, if you long term lease it’s really like owning that property for that set period (decades in fact), with the ability to sub-let or sell the remainder of the lease to someone else – it’s usually entirely at your discretion.
Villas in Bali are a very popular long term property option for expats.
How affordable is property in SE Asia?
Of course, this varies depending on where you’re from and which SE Asian country you’re comparing it to. But clearly SE Asia offers remarkable affordability. Below is a simple cost comparison in US dollars:
- Bangkok, Thailand: $70,000 – $200,000 for a mid-range condo.
- Jakarta, Indonesia: $50,000 – $170,000 for a city-centre apartment.
- Kuala Lumpur, Malaysia: $70,000 – $340,000 for a high-end condo.
- Phnom Penh, Cambodia: $35,000 – $140,000 for an apartment.
- Manila, Philippines: $50,000 – $200,000 for a central condo.
- Ho Chi Minh City, Vietnam: $70,000 – $270,000 for a modern apartment.
The above, of course, are in the major cities which can be comparable to the centre of high tourist areas. Even better value WILL be had for regional areas or on the periphery of those high tourist areas.
In comparison, properties in cities like New York, London, or Sydney can range from $350,000 for a very basic apartment to several million dollars.
You may be surprised with what you can afford in SE Asia.
Final WOrds on Buying a home in SE ASIA
Buying a home in SE Asia can be an attractive option due to its affordability and potential long term investment value.
Each country has its own regulations, but there are opportunities for foreign owners in condos and/or long-term leasehold properties. Whether you are looking for a home for retirement, an investment, a second home, SE Asia provides diverse and lucrative options.
Before purchasing, it is advisable to seek legal advice and understand local property laws to ensure a smooth and profitable investment. There are many reputable real estate professionals that will be more than happy to help you through the process. You’ll be happy to know (perhaps) that real estate people seem to be the same everywhere – they’ll be glued to you and assist in any way they can to get you into that property.
And like anywhere else, do your research!
“Remember, you can live in Asia and still receive the Age Pension if you are an Australian”.
