With its attractive resorts, lively entertainment scene and close proximity, Thailand has long been a popular holiday destination for Hongkongers. As a result, it has become a prime market for property investors. It’s not only Bangkok that’s attracting buyers – other markets are burgeoning, too.
"Hong Kong investors recognise the investment potential of Phuket – such as the upcoming Patong tunnel, the recent developments of multiple retail complexes and duty-free outlets, and the expansion of the airport – and choose to purchase for capital appreciation and investment return," says Kingston Lai, director of Golden Emperor Properties. "Pattaya, on the other hand, is relatively new in its appeal to investors. But that is quickly changing with the impending high-speed rail from Bangkok and a new airport being developed in the city."
Freehold condominiums are the most sought-after properties in Thailand, as the title deeds are in the investor’s name and there is no need for a Thai resident to be involved in the purchase. Also, leasehold landed properties have recently gained interest among Hong Kong purchasers seeking larger homes with private gardens, well-equipped kitchens, spacious bedrooms and bathrooms, and resort facilities. Rental yields in such locations are projected at around six per cent per annum, while capital appreciations are around 10 to 15 per cent per annum for Bangkok properties.
Kingston says when it comes to interior design, his clients prefer luxurious, opulent developments with branded designers, or those with local Thai resort influences but designed with modern touches, such as Burasiri San Phi Sue by Sansiri, a resort-style residential project in Chiang Mai. However, his advice is to "keep everything simple", especially if the purpose is for buy-to-let.
Close to home, Japan’s myriad attractions continue to entice visitors from Hong Kong. Noritaka Noma, head of sales and marketing in Japan for Grosvenor Asia Pacific, says, "In terms of investor appeal, Tokyo’s property markets exhibit strong fundamental performance. Vacancies for high-grade residences reached a post-GFC low in the fourth quarter of 2015, with both rents and property values are on a rising trend, and Tokyo’s appeal should further grow as the 2020 Summer Olympics rapidly approaches."
Residential occupancy rates in Tokyo have grown to 95 per cent since 2009. "Rental growth is only now beginning to pick up, giving investors the opportunity to tap into this positive growth cycle," says Noritaka. "With the rental growth outlook and expected increases in wages, we expect investor interest in the residential sector to continue."
There was a positive net migration of 120,000 to Tokyo last year, marking the fourth straight annual rise. Central locations with good transport connectivity remain the most attractive. According to Jones Lang LaSalle, capital appreciation for newly built condominiums in prime locations since 2013 can reach 20 to 25 per cent.
There are a number of large redevelopment initiatives taking place across Shibuya, Shinjuku, Ginza, Roppongi and Nihonbashi – meaning Tokyo’s residential values still have room to appreciate. So what are renters looking for? "Large-sized condos in central Tokyo, such as those at The Westminster Nanpeidai that average 1,200sqft, remain very rare, and so under current market situations we believe they are very competitive," says Noritaka.
International designers are becoming more popular in the Tokyo market as well, with many balancing Western elements with more traditional Japanese tastes. Noritaka advises, "What’s crucial is to understand local culture and trends, as opposed to just what’s happening internationally."
Canada holds immense appeal for countless Hongkongers who have been visiting the country and sending their children there to study for years – many already have Canadian passports. "The relatively transparent tax and legal systems also play a part, as does the beauty, fresh air and security," says Mark Elliott, associate director of international residential property services at Jones Lang LaSalle in Hong Kong.
Around 10 per cent of new condominiums being built in central Toronto are now going to foreign buyers, according to a survey released in April by the Canada Mortgage and Housing Corporation (CMHC); the vast majority of buyers are believed to be Chinese. Mark suggests this is because Toronto is "more commerce-centred," and is historically a slightly more stable and sustainable market in terms of average capital gains (three to four per cent per year), whereas the main focus for Vancouver is its desirable lifestyle as well as the hugely successful university, which brings a vast influx of international students. "The sheer beauty of the city and its surroundings will always attract buyers and renters, and it has recently seen a slightly more aggressive market in terms of capital gains," he says.
The sought-after properties tend to be new-builds in central locations, with houses and townhouses performing the best. "They are in short supply," Mark adds. "Land is scarce and demand is soaring, therefore prices appreciate – eight to 10 per cent last year – but also properties rent very well and very quickly."
When it comes to interior design, Westbank and Concord are established and respected names to look out for. "I personally would put a little more time into making my apartment stand out from the rest on the rental market," advises Mark.