Though some countries present a better outlook than others, Southeast Asia is a very attractive region for real estate. Strong economic fundamentals, demographic dynamism, changing behaviors and the digital revolution bring new opportunities for various actors involved in the real estate sector.
In the following video, Bloomberg’s Shery Ahn questions PropertyGuru Group’s chief executive officer, Steve Melhuish, about real estate in ASEAN.
Opportunities for real estate in ASEAN
ASEAN as a whole benefits from very strong fundamentals that drive the real estate market: the region has both a high population growth and a high GDP growth.
Vietnam has recently eased its foreign ownership rules, allowing foreigners to buy private property in condominium. The authorities of Indonesia are also discussing the issue of foreign ownership to boost investments, especially for higher end properties.
The Singaporean and Malaysian markets have been cooling down since 2014-2015. To try and stimulate buyers, both governments will probably start to relax measures previously taken to cool the market so as to stimulate buying and investments in the coming months or years.
Nevertheless, Singapore has become the leading country in Asia for foreign investments in property. Investors from around the world have invested in the island thanks to easier laws on capital and real estate, expecting returns from the natural rise in real estate prices. The recent cooling down of Singapore has however prompted some divestment from the market.
Indonesia remains a very attractive market for real estate, particularly because of its demography.
- Indonesia has a large and young population: as Indonesians get their first jobs, they integrate the middle income population and join the middle class.
- There are currently 45-50 million people in the middle class in Indonesia. It is expected to grow by at least 40 more million in the next 40 years.
- The growth of the population is driving urbanization: cities grow as young adults need to find work and home.
These demographic trends are expected to pull the demand for real estate and keep developers busy for the coming decades. Furthermore, the government has launched the “1 million homes” program that will stimulate the lower end of the market. Ripples of this Indonesian boom can also be seen in the stocks of real estate companies.
For more information on real estate in other ASEAN countries, check:
Digital real estate marketing
People are increasingly accessing the Internet in Indonesia, and most ASEAN countries, through mobile devices. The combination of booming real estate and the explosion of the use of smartphones brings new dynamics for online property search which create new opportunities for real estate marketers.
In this environment, online portal need to reach more and more people, be they marketing real estate in Indonesia, in Vietnam or wherever in ASEAN. This can be done by growing organically or through M&A (buying or merging) with other online portals.
One of the major keys to succeed in marketing property online is to ease the property buying experience. The important decision of buying a home is an important source of stress and hesitation for property buyers. The job of online portals is therefore to enhance the buying experience, notably through:
- Transparency. Provide research and information to buyers and help them in their property search and decision making process.
- Investment in marketing. Increase exposure of the brand and attract people to the website.
- Innovation. Try new things, products and services to improve buyers’ experience and take the importance of the use of mobile devices into account.
Bloomberg video from December 2015