What are the Most Attractive Countries to Invest in Real Estate

Top 5 countries in Asia to buy real estate

Prior to investing in real estate, you need to research the market that you want to buy into since getting all the information you need is important. While there are a lot of options when you invest in real estate, you cannot simply look at one country’s market. Considering there are numerous countries there with booming real estate industries, you have to do your due diligence first to ensure where you’ll profit best.

The real estate industry in Asia is booming, especially if you look at the rental yields alone, you can already make an estimate of your gains. Among these countries, however, there are some whose market is soaring despite the pandemic. Check them out below.

1. Cambodia

Daun Penh, Phnom Penh

Buying real estate property in Cambodia is possible, whether you’re a local or foreigner. While foreigners are only allowed to buy properties but not the actual land, it is still a great investment. Since the country has one of the highest rental yields, with it being 5.33%, profits abound here if you’re an investor.

The real estate market in Cambodia has been rapidly rising for years, especially when it skyrocketed from only 178 condo units in 2009 up to 18,000 units in 2019. According to CBRE Research, the supply surged further in 2020 by 27% despite the pandemic slowing down construction projects and the market cooling down a bit.

A report released by global real estate consultant Knight Frank showed that the numbers of condominium units will increase to 53,512 by 2023 in Phnom Penh. When supply increases by that time, along with the country restrictions easing because of the pandemic, it is predicted the demand for properties will peak again.

Additionally, the rental yield for popular cities for investment within Cambodia are higher than average. In Phnom Penh, it’s 8% yield according to an analysis report by R&F City. This is the highest yield compared to other Southeast Asian countries. Following that, the second most popular city in Cambodia, Siem Reap has a gross rental yield of 6.51% in the city centre. It’s 5.60% yield if it’s outside the city centre, according to the report released by Numbeo.

2. Philippines

Manila City, Philippines

Among Southeast Asian countries, the Philippines has one of the highest average rental yields at 6.13%. While the country’s response to the pandemic dampened economic and real estate market boom, the market demand is believed to increase in the following months. 

The country’s market is pro-landlord, allowing for investors like you to increase the rent according to market demand or require rent to be paid a year in advance. This makes it easier to determine the profit from your investment and plan your next financial moves.

Additionally, property yields can reach to 9% if you invest in condominiums located in large cities like Metro Manila, Makati, or Taguig.

3. Thailand

Bangkok Grand Palace, Thailand

More than the numerous tourist destinations you can visit, Thailand has one of the best real estate markets for investments. Since buying prices are low in the country with an average rental yield of 5.13%, your profits are higher especially if you get a property in the city like Bangkok.

Demand for properties decreased recently due to the pandemic but market prices seem resilient. Land price index in Thailand rose to 8.4% in May 2021, a high comparison from 2018 at 2.8%. 

Additionally, Thailand is pro-landlord where you can set rent, make adjustments as per market research, and give prior notices. 

4. Malaysia

Kuala Lumpur, Malaysia

One of the countries with lower priced real estate properties is Malaysia, making it a great place to start investing in. Construction of properties rose these last few years, allowing for more than $4.41 billion apartments according to Global Property Guide to remain unsold, especially since the pandemic slowed down market demand.

However, while market demand has considerably staggered, Malaysia’ real estate market remains stable. In the past 15 years, property prices in the country rose by 2% to 3%, indicating demand continues to rise and a market collapse is not bound to happen. Additionally, Malaysia has an average rental yield of 3.72% and can increase up to 5.4%, depending on the location.

5. Indonesia

Jakarta Intersection, Indonesia

Following a steady increase of economic growth, Indonesia slowed down by 2.07% in 2020 due to the pandemic. However, the economy is expected to improve by 4.5% to 5.5% this year. Additionally, the average rental yield is at 7.09% and can increase up to 7.7% if you have higher end apartments or properties.

In Jakarta alone, higher end apartments cost around $2,500 – $2,800 per square meter while villas in Bali cost an average of $2,000 per square meter. While rental yields are attractive in Indonesia, buying costs can range from 11.75% to 17.75% so you need to conduct your research properly to see which one will yield the profit you want.

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