As one of the world’s most economically varied regions, Southeast Asia is home to the entire bell curve of real estate. From incredibly inexpensive apartments built as much for efficient space usage as comfortable living, all the way up to ultra-luxury designer penthouses, Southeast Asia’s big cities offer every option in real estate.
However, given the somewhat restrictive economies of much of Southeast Asia, and the copious government regulations in many countries, acquiring real estate in most Southeast Asian countries can be a difficult process. From nationalistic property law, which is ubiquitous in most Southeast Asian countries, to local corruption and competition issues, buying a home or apartment in Southeast Asia isn’t a simple process.
However, with the right degree of know-how and financial literacy, buying a home or apartment in Southeast Asia is far from impossible. The following guide explains the process of renting a condominium, apartment, or home, and buying a condo or apartment in most Southeast Asian countries. It also covers the somewhat murky laws surrounding property ownership for retirees in Southeast Asian countries.
In Thailand, Malaysia, Singapore, and several other Southeast Asian countries, the process of renting an apartment, condo, or house is fairly straightforward. Retirees in Thailand are able to sign the lease on a condominium even on a basic tourist visa, allowing them to reside at the property of their choice according to the lease terms.
The situation is similar in Malaysia, where non-residents and tourists can easily rent property. In Singapore it’s the same again – signing a lease for property requires no special visa or residence status.
Buying a condo or apartment, however, can be more complex. In Thailand, retirees and foreign residents are entitled to buy condominiums, but they are not entitled to hold a total of more than fifty percent of a residential project. This means that most real estate developments in Thailand are split in ownership capacity, with citizens of Thailand owning 51% of the development through unit holdings, and foreigners, the remaining 49 percent.
The housing and property laws of Malaysia and Singapore are more liberal than those of Thailand, and foreign residents will have fewer issues purchasing into a condo project in these countries. However, all regions can present legal issues and new customs for foreign property buyers to deal with, as well as unique market conditions and price points.
Purchasing land in Southeast Asia is a touchy subject in many countries. One of the most restrictive, despite having a relatively liberalized property market overall, is Thailand. While foreign investors can own up to forty-nine percent of residential condominium developments, it is forbidden for foreign residents to purchase land, or even to hold land on behalf of family members, on Thai soil.
There are several loopholes that foreign residents have used to get around this restriction, including Thai financial trusts and local companies supported by an investor in Thailand. Despite this, purchasing property in Thailand is generally a very difficult process for those without an exceptionally high income.
Malaysia’s property market is more liberal and open than Thailand’s, with foreign residents able to easily purchase property. However, foreign property investments must be above a minimum value, encouraging foreign investors to only invest in high-end properties in order to avoid disturbing the domestic mid-range market.
Singapore is significantly more liberal, allowing foreigners with residency status to purchase almost any property in the small city-state. Given that Singapore is home to some of the highest real estate prices in the developed world, it seems rare for any retirees to the city to purchase large or exceptional properties in any case.
The cost of renting or purchasing property differs dramatically from one location to another, even within a single country. For example, a simple yet comfortable home in one of Bangkok’s outer suburbs can be rented for as little as $250USD per month. A home in the center of town – even a modest two-bedroom townhouse – could cost well over $1,500USD per month due to the more desirable and central location.
Singapore’s property market is a similar situation, albeit with the prices of all types of property stretched to truly silly levels. Basic homes in Singapore can cost several thousand USD per month to rent, even on a long-term contract. At the basic level, a small studio or one-bedroom apartment can be found in Singapore for $1,000 USD per month, or even less in lower-end neighborhoods.
If you plan to purchase a home or condominium in Thailand or Malaysia, and to a lesser extent Singapore, it’s worth considering the maintenance costs and general level of building maintenance that will occur. Structures in tropical countries tend to age more rapidly than those in temperate countries due to the heavy rain and humid weather. As a result, a ‘new’ condominium that’s just ten years old can quickly turn into an aged, undesirable unit if the building isn’t maintained well.
As a result, it’s essential that you research the developer you invest with, if you do decide to purchase a home or condominium. Good maintenance, and a proactive and well-informed building management team can be the difference between a perfect condominium or home community, and a disaster residence that ages rapidly and loses much of its value.
Finally, many Southeast Asian cities – Hong Kong and Bangkok, in particular – are home to a huge number of ‘mansions,’ or townhouses built during the 1960s and 1970s. Generally five or more floors tall and lacking in all aesthetic qualities, these buildings offer some of the cheapest accommodation in the central city areas.
While inexpensive, many of these buildings operate in violation of the fire code, and in violation of many public safety laws. When purchasing a townhouse or renting a unit in an older building in many Southeast Asian cities, ensure that it has been subject to a recent review by the fire department and public safety office.
From inexpensive country homes to high-end condominiums, Southeast Asia offers a variety of real estate options that’s second to none. However, without the right mentality, what seems like a dream can easily turn into a nightmare. Apply the real estate wisdom outlined in this article and you’ll have no issues finding a great home, condominium, or apartment in a Southeast Asian city.