Both overseas and local projects are still seen as an attractive asset class, the intricacies and prospects of which will be discussed at The Edge Malaysia RealTalk 2022 on July 16. The annual real estate forum (formerly known as The edge Real Estate Investment Forum) finally returns after two years. With the theme “Investing in times of volatility: how, what, where?”, the event will be held at One World Hotel in Petaling Jaya, Selangor.
One of the speakers will be Chong Shu Ling, a senior negotiator who heads the global residential agency of JLL Property Services (M) Sdn Bhd. She will talk about overseas residential real estate hotspots as well as the benefits, do’s and don’ts, and myths of investing in such projects.
Meanwhile, Architect Center Sdn Bhd director, architect, building inspector and trainer
Anthony Lee Tee will speak about investing in future-proof properties (beyond location and price), covering issues such as sustainable financial management and long-term maintenance.
Asset class attractive abroad
“Malays buy residential properties abroad for several reasons. One of them is for diversification purposes,” says Chong.
“Asset diversification is decreasing [your] risk and, when combined with stable rents, will improve the risk-reward profile of your investment. Other reasons would be inheritance planning, a holiday home, school accommodation for the children (buying instead of renting) and migration.
According to JLL, house prices in the UK are expected to increase by 23.5% between 2022 and 2026, translating to an average growth of 4.7% per year. The UK is expected to experience the strongest economic growth of any G7 economy in 2022. Interest rates have remained low by historical standards and are expected to remain so for the next few years, according to the company.
Although many homeowners in the UK are facing higher mortgage payments, NatWest reported “no signs of stress” as demand for mortgages remained strong, Chong said. “Prices are now 19.7% higher nationally than they were before the pandemic, particularly in London. House prices in London have risen at a faster rate than in any other region of the UK.
“In Germany, the government strives to make its real estate market profitable and stable, so after 10 years of ownership, investors/buyers can benefit from a tax reduction of up to 100% on their most -values. Additionally, short-term benefits include [being able to use] your mortgage interest to offset your income tax,” says Chong.
Zooming in on Portugal, JLL says it has been ranked as the “world’s number one destination to visit after Covid” by Forbes magazine as well as “the number one quality of life index” by Expat Insider 2021. “Portugal is the “one of the safest countries in the world, with a strong and growing economy based on technology and innovation. With excellent health and education facilities, it offers the best in terms of quality of life by compared to all the countries of the European Union”, he adds.
Dealmaker or dealbreaker?
Investing in future-proof properties, Lee from the Architect Center will discuss deal breakers and deal breakers, and what to look for. “In these volatile times, we must look at developments beyond their location and price, and invest on the basis of sustainable financial management and the long-term maintenance of our investments,” he said. .
Lee will also highlight the changing trend and growing demand for strata developments. With land suitable for development becoming scarcer and real estate more expensive, condominium developments are now the most practical choices, he says.
“High density living in high density urban landscapes is and will be the norm. The demand for mixed-use strata – for example, two, three or more in an integrated development – [can be] seen everywhere. In fact, land holdings are now land strata, and gated and guarded developments are mostly land strata.
Due to the complexity of designing, planning and executing these properties, careful consideration must be given to their ownership, management and maintenance, Lee points out. These issues came to the fore during the Covid-19 pandemic, he says.
“Responsible and far-sighted developers have brought their teams together to anticipate problems [related to] the co-ownership and financial sustainability of these developments with their equipment and characteristics. Terms such as exclusivity, unique features and facilities are [often thrown around], but how sustainable will they be in the long term? says Lee, who will further reveal the complexities involved during his presentation.