Australia

From 2012 to 2016, domestic developers and investors purchased 58.4% of residential development land in Australia, while the largest foreign developer group hailed from China (23.4%). Last year, Chinese developers and investors purchased $2.4 billion worth of residential development sites in Australia – a 9.4% increase from 2015. Boasting an economy record without recession for over 25 years, Australia has also seen a steady population growth partially fulfilled by a healthy immigration rate especially the high-net-worth individuals.

Cambodia

Real estate developers from across Asia, particularly from China, Singapore, Taiwan and Korea have gone into Phnom Penh, seeking a share in one of the last frontier markets in Asia. Additionally, legislation in 2010 that allowed foreigners to buy high-rise property paved the way for more inbound investments. The country’s economy has been growing around seven percent on average since 2010, attracting investors to buy up residential lands and units to tap on the growth opportunity in this fast-urbanizing nation.

Mainland China

The acquisition of residential development sites had been dominated by local buyers; the only major foreign group of buyers came from Hong Kong. In first-tier Chinese cities, domestic developers accounted for 86.6% of the total sales value while Hong Kong took up 12.9% of the share for 2012 - 2016. As the market matures, to some, the incentive to expand domestically is thinning as competition toughens and profit margin returns to a normal level; to others, aggressive moves on land-banking is necessary given a persistently strong demand and undersupply in certain cities.

Hong Kong SAR

The land-buying activities in Hong Kong by mainland Chinese developers is widely reported in the press. In the past two quarters (Q4 2016 to Q1 2017), mainly driven away by harsh cooling measures and the need to hedge against the declining Renminbi, mainland Chinese developers have outspent Hong Kong developers and accounted for 62.1% of the total sales volume. Even though on the surface, from 2012 to 2016, developers based in Hong Kong had stayed as the dominant buyers (92.0%), many of the developers listed in Hong Kong have roots in the mainland.

India

Recent property-related reforms such as the Real Estate Regulation Act, REITs, foreign direct investment (FDI) and goods and services tax are encouraging to investors in the long term. For foreign developers, this is especially true as the Indian government now allows 100% FDI into the real estate industry. As such, increasingly, foreign investors are partnering with local Indian developers to expand their footprints in India. For 2017, the Indian economy is expected to grow by 7.4% which will help put its real estate market on the radar of many investors.

Indonesia

With about 29 million Indonesians in their productive age, the fourth-most populous country in the world presents huge market potential for residential developers and investors. Through joint ventures and outright purchases, many overseas investors are partnering with Indonesian developers to share risks and increase funding. Also, local developers will be able to speed up the development of their large land banks and leverage on international brand names and technical expertise from foreign investors to boost the marketability of their projects.

Malaysia

Favourable foreign residency scheme, low cost of living and strong economic potential make Malaysia appealing to international investors. In the past five years, about 35.0% of residential lands were purchased by foreign buyers, of which the majority was from mainland China. Johor state, which is just across the border from Singapore, has emerged among the top destinations for Chinese developers. Barren ground and reclaimed lands are being turned into high-rise luxury flats, targeting buyers from China as well as overseas buyers like Singaporeans. As its closest neighbour, the investment into Malaysian residential land by Singaporean investors has been healthy – but significantly lower than the Chinese from 2012 to 2016 ($964 million versus $2.4 billion).

Singapore

From 2012 to 2016, domestic developers constituted most of the market share at 79.0%; the rest of the share was split among different countries with none of them having shares of more than 10.0%. In Singapore, developers face some of the most stringent regulations such as Qualifying Certificate rules and Additional Buyers’ Stamp Duty, as the government aim to prevent land hoarding and encourage reasonable pricing.

Thailand

The Thai residential sector is often favoured by foreign investors as a gateway to other ASEAN countries. While residential land investment activity by overseas developers to date seemed limited on the surface, some of the transactions were done in joint ventures with local Thai developers or acquisitions of stakes in Thai property companies, due to government’s restrictions on foreign ownership. Such strategic joint ventures are symbiotic as local developers may tap on the networks their foreign partners have in their home countries.

Get more insights on Asia-Pacific Residential Review May 2017