48 | THAILAND & JAPAN
LETTER FROM
Letter from Thailand (part 2) Last month, Anthony King told us about Phuket from a developer’s
perspective - now he fills us in on why so many people invest in the city villas has now been deemed unlawful. Only Thai nationals have a right to own land, therefore foreigners are limited to buying condos in buildings that are at least 51% Thai owned. Some companies use complex company structures or long term land lease to overcome this, but condos present a much safer option. For high-fl yers and those who
R
eal estate in Phuket is, in some respects, a lot more established and sophisticated compared to other coastal regions, like Pattaya, Krabi and Koh Samui. There is a wide range of estate agents:
Phuket.net, Tropical Properties and Phuket Realty, to name a few. This alone attracts a large number of foreign investors to a market once dominated by buyers from Hong Kong and Singapore. Phuket real estate is now seeing a large infl ux of European and Russian investors. Phuket was very heavily marketed in the 1990s by Laguna Phuket – an area of man-made lagoons in the Bang Tao district. A lot of spin off properties are now available to buy from companies associating themselves with large brand names such as the Banyan Tree, Sheraton, Allamanda and Dusit Laguna. Although villas are the most desired property choice in Phuket, they are often unaffordable and condos serve as a second choice. Condo buildings are concentrated in developed areas such as Patong and Karon and are now back in vogue since the structure typically used for foreigners to buy
“Phuket real estate is now seeing a large infl ux of European and Russian investors”
can afford a second home, villas are a popular choice in Phuket and are offered by numerous developers (us included) who have seen the demand in this sector. Mostly, they are luxury property options. Some are sold as stand alones, but mostly they are offered as part of an exclusive project. Since the land they are built on cannot be owned by foreigners, a round-about ownership structure is created.
Phuket property market has also proven popular with investors who see the potential and low risk in this lovely tropical location that is increasingly becoming a jet-set magnet. With a solid infrastructure and demand from the wealthy, it is seen as a good option for investing in property. Also, it is important to consider the distance to the airport. A lot of Phuket’s part- time residents, work in Hong Kong, Singapore, Bangkok or other parts of Asia, thus the commute when time is precious can often be limited. Most importantly, when investing in properties in Phuket, is the reputation of the developer. Phuket probably boasts a higher standard than anywhere else in Thailand – and this is largely due to the international nature of the industry. Many of the companies are managed by experienced property developers from other sophisticated locations, with the advantage of competent local staff. Initially it was the wealthy Bangkok Thai nationals that snapped up much of the land during Phuket’s original boom, when its potential was recognised in the early eighties. This has dominated
www.opp-connect.com | APRIL 2013
Anthony King graduated in the UK. He is Managing Director of John Anhony Group, which is based in Phuket, Thailand. He specializes in architecture and project manage- ment.
info@johnantony-group.com +66 852275608
www.johnantony-group.com
the commercial property business, including resorts, and retail space in the popular tourist centres. Now the focus is more on residential villas as second or retirement homes for the wealthy. Many buyers do so purely for investment as the pre-build price usually matures by up to 70 per cent following completion.
Letter from Japan Japan hasn’t had an easy time of it for many years. First financial and
apan, an island nation completely surrounded by ocean, has limited usable space with many people to share it with. Imagine putting half of the population of the United States into the state of California. Then imagine all those people fi tting into 25% of available land, because the rest is thick with forests and hilly, mountainous regions. That’s what Japan is like. This puts real estate in high demand as the supply is short.
J Most of the population is centred in
Tokyo, Nagoya or Osaka metropolitan, as they offer the most opportunity for younger people.
The population is a major problem for Japan. The birth rate remains low and the elderly population is rapidly increasing. Japan cannot continue this for very long, as soon there will be more elderly than the young work force supporting the elderly.
The two options are for Japanese people to have more children (hasn’t worked yet) or to relax immigration laws and increase the work force and taxpayer base.
Since the bubble era (Japanese asset
then natural disaster rocked the economy - but things may be improving price bubble) of the late 80s-early 90s, real estate values have dropped off signifi cantly. There was also an increase of propety prices from 2005-2008. However, with the way the economy has been (rising stock prices, yen getting weaker), people are at least optimistic and at best getting bullish as we speak. The drop from last year has been negligible, under 1%.
“With the way the economy has been, people are at least optimistic and at best getting bullish”
In Japan, we call the recent fi nancial crisis “Lehman Shock” because it was such a shock to see such a giant bank fail. This was the fi rst mass exodus of expatriates living in Japan as opportunities were low.
At the end of 2010 to the beginning
of 2011, things were looking great again, fi nally stabilizing after such a mess from the crisis three years prior. That is when the triple disaster
came on March 11th, 2011 – the 2011 Tōhoku earthquake and tsunami and the ensuing nuclear meltdowns at the Fukushima Power Plants. This was the trigger for the second mass exodus of foreigners living in Japan. It seemed like everything came to a halt for three months. The busy Shibuya intersection with all the neon lights, mega screens and billboards were all shut off due to the electricity shortage. It was like the set of a zombie movie, so lonely and dark. (I will leave the rest for another time.) So, Abe comes into power recently, shooting aggressively for a 2% infl ation target for Japan; to try to get Japan out of the Lost Decade(s). The Nikkei (stock index) has increased from the 7,000s to the now mid-12,000s. The Japanese yen has also weakened substantially from the high 70s last year to the mid-90s to the US Dollar. The interest rates have stayed low (0.875% for variable, 1.99% for a fi xed 35-year term). There are government exemptions and tax breaks for property owners who have a home loan. Sales wise, residential real estate
Jason Foutch is a real estate agent based in Tokyo. He is experienced in representing both buyers and sellers, leasing and property management of residential real estate.
jfoutch@c21-smica.com www.c21-smica.com/33offi ce
has really increased; I cannot comment too much on commercial or rental properties. As foreigners return to Japan, traders, bankers, engineers (upper class), the large rental properties get more demand.
New businesses and branches opening in Japan would be expected if Japan’s economy can maintain the strong rebound from recession.
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68