Our local investors are no stranger to the foreign property investment scene, with many being well-travelled and updated on foreign market conditions. In fact, as many more are becoming increasingly financially savvy and looking for reliable methods to grow their wealth, overseas investments are a natural consideration to diversify a savvy investor’s portfolio.
Courtesy of EdgeProp-Knight Frank Homebuyers’ Sentiment Survey conducted in 4Q2018, the top 3 investment cities identified are Melbourne (23%), London (21.7%) and Bangkok (17.9%). No surprise there, as these cities have a track record of having some of the most reliable yields and promising growth rates, as well as being some of Singaporeans’ most travelled destinations.
Familiarity and Growth Potential Are the Top 2 Main Considerations
“Usually, buyers will invest in markets they are familiar with, and those that are close to Singapore”, says Lee Nai Jia, senior director and head of research at Knight Frank. Some other important considerations can include the growth potential and political stability that surrounds these markets.
Australian cities such as Melbourne, Perth and Sydney are popular with Singaporeans as many have pursued their education in those cities, and are familiar with the laws, dynamics of the city and property markets there, says Lee. He adds that prices of residential properties in Melbourne have continued its upward trend, rising by 3% Y-O-Y in 3Q2018.
“Buyers are also inclined to invest in gateway cities such as London and New York”, he adds. The main rationale to the heightened interest in London homes is because home prices in the UK have declined due to political uncertainty and higher taxes on non-residents. “As at 2Q2018, residential prices have eased 1.8% Y-O-Y on average”, says Lee.
As for the current interest in Bangkok’s markets, he shares that residential prices are largely stable, albeit minor fluctuations have been observed in recent quarters.
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