The Best Places in South East Asia to Buy a Second (Holiday) Home

Our holiday spirits are high with the imminent arrival of summer. For some of us, the mere daydreams of sun, sand, and sea turn into thoughtful considerations of buying a permanent holiday home where we can endlessly enjoy the dual benefits of a second home base for quick getaways and even additional rental income when the property is not in use. 

Southeast Asia is a region that has caught the eyes of foreigners over the years. Real estate in Southeast Asia is one of the fastest-growing property regions globally, especially for buyers looking to invest in a second “holiday” home that can be used for personal and investment gains. This has led to surging prices in much of the Southeast Asian real estate investment market. There are a few top hot spots in SouthEast Asia that can make perfect holiday escapes, retirement sanctuaries and/or for investors looking to flip and rent out said properties during certain seasons throughout the year. 

If you are considering buying a holiday home as a second investment real estate property, here are some questions that you should first think about: 

1. Are you currently financially stable and comfortable enough to invest in a second home?

You should constantly evaluate your financial strength’s current and predictable future status before diving into the second investment of real estate property. It’s easy to fall passionately in love with a dream holiday home and to the luxurious lifestyle that owning a holiday property can bring, but many people free fall down a financial spiral by making the very common mistake of not carefully and thoroughly assessing all the financial fundamentals before the purchase. 

It’s crucial to remember to lead with your head and not just your heart, so keep these questions in mind: 

• Why am I buying real estate now? What is the primary purpose? 
• Am I in love with the idea of a holiday lifestyle, meanwhile neglecting the investment logic behind it?
• Am I fully aware of the knowledge and work required on the backend of owning a holiday home?
• What kind of returns will I get by buying this particular property? Does it make sense from an analytical standpoint?

If you are able to answer all of these questions soundly, we can then move on to major point number 2, moving you one step closer to becoming an owner of a holiday home. So, after personal evaluation, you have decided that a second home is feasible for you. What’s next? 

2. Which countries in the Southeast Asia region are the best for buying a second holiday home and why? What are the different real estate/property laws and business laws in the different countries where you seek to buy property as a foreigner? 

Southeast Asia is a beautifully diverse region scattered with magnificent countries for every kind of taste. The entire region is a splendid composition of eleven countries (Brunei, Myanmar, Cambodia, East Timor, Indonesia, Laos, Malaysia, Singapore, Thailand, Vietnam, and the Philippines), each with its own impressive concoction of history, geography, and cultural landscape. The real problem isn’t pinpointing a country to fall in love with because the variety of choices is diversely abundant. The main issue that buyers and investors face is that certain barriers to entry restrict a foreigner from investing in the real estate market in specific countries and the laws all run differently from region to region. 

Although the Southeast region totals to eleven beautiful countries, there are only five where property investment as a foreign national is more logistically possible. We will take a further look at these five countries, which are Singapore, Malaysia, Thailand, Cambodia, and the Philippines. Each country has its own set of pros and cons from the property investment standpoint, and there is no single best country within Southeast Asia. It really depends on your individual preferences and what your long term goals are.

THE BIG FIVE COUNTRIES

Singapore

• Ease of Entry/Degree of investment: 

Singapore is considered the easiest real estate market to enter as a foreigner out of the five countries. Most foreigners can invest in condominium units, executive condominium flats, and landed houses in an approved condominium development. Still, to purchase land, there is a requirement to apply to the Singapore government along with a hefty amount of spare cash. 

Foreigners are approved to acquire property in the form of condominiums but NOT allowed to purchase residential properties of the following unless they have prior government approval: 

• Vacant land
• Residential property in a building of less than 6 levels
• Landed residential property - bungalows, terrace houses, semi-detached houses

• Prices: 

Singapore boasts one of the most expensive real estate portfolios in the global market. There is also a rather high government-imposed 15% tax on any real estate purchases by foreign property investors in Singapore.

Malaysia

Malaysia is famous for its scenic beauty, tropical climate, crystalline beaches, phenomenal food culture, and lively atmosphere. For potential buyers, it’s a premier destination for a second home due to its relative low cost of living and exciting property market with low economic fundamentals. 

• Ease of Entry/Degree of Investment:

Out of all the countries in Southeast Asia and amongst the Big Five, Malaysia is a unique country where foreign investors can own condominiums, homes, and even land. It is a good place for those who seek more flexibility and options. 

In Malaysia, there is a law that sets a minimum price set forth strictly for foreign buyers in its real estate properties, more specifically, the luxury market. Keeping the luxury property market as a separate entity from its local market keeps cheaper properties at a price bracket that local residents can afford.

• Prices:

Malaysia is one of the most inexpensive countries on our list compared to the rest, which makes it ideal for buyers who want to deal in a lower bracket. As of 2014, the minimum value to purchase property is set at MYR 1 million - about 250,250USD. 

Notable Areas:

• Port Dickson
• Langkawi
• Penang
• Kuala Lumpur
• Klang Valley
• Mont Klara
• Kajang

Thailand

Thailand is one of the most popular destinations for holidays and long-term living. There is a year-round tropical climate, with the benefits of an affordable and comfortable lifestyle that beats out its western competitors. 

• Ease of Entry/ Degree of Investment:

In Thailand, foreigners are able to own condominiums and homes in their own name on a freehold basis. This means that the buyer/investor owns the property outright, in perpetuity. On a freehold, you don’t have to deal with any of the following: 

• No need to pay annual ground rent, service charges or any other landlord fees
• No need to deal with the landlord as you own the property outright

But listen up, here’s the catch; the land (including agricultural land) that the property is built on cannot be owned by the foreign buyer.  

However, unlike Malaysia, there is no minimum price requirement for foreigners. 

• Prices:

Thailand property prices are steadily increasing and much more expensive than real estate properties in Cambodia. 

Notable Cities:

• Chiang Mai 
• Phuket
• Koh Samui
• Bangkok
• Hua Hin

Cambodia

Cambodia is a country that continues to grow very rapidly and is among the most emerging of markets in the Southeast Asia region. In Cambodia, real estate prices have been rising exponentially per annum, especially in major cities like Phnom Penh and Sihanoukville. The economy is mainly driven by the agriculture and tourism sectors. It has, as a result, drawn in a more diverse and multicultural society, which has made the country even more attractive to foreign buyers and investors.

• Ease of Entry/ Degree of Investment:

Foreigners can own property in Cambodia, but there are certain restrictions.

Cambodia generally follows the same rules as Thailand in that foreigners are able to own property on a freehold but cannot own any land. 

Like Thailand, and opposite of Malaysia, there is no minimum price requirement set as a threshold for foreign buyers and investors in the real estate space. 

• Prices:

Although Cambodia’s property prices are not in the ballpark as Thailand at the moment, the country’s real estate growth is accelerating at a much faster pace. There is definitely a growth spurt happening over there. 

Buying property in Cambodia can be on the cheaper end because of its low real estate tax. 

Notable Areas:

• Phnom Penh
• Chroy Changvar
• Siem Reap
• Sihanoukville
• Koh Rong Samloem
• Kep
• Kampong Cham

Philippines

The Philippines makes an ideal location for owning a vacation home right by the pristine beaches and beautiful nature that the country is oh so famous for! 

• Ease of Entry/Degree of Investment:

Along the same path as most of the countries on this list, foreign buyers/investors can own property in the form of condominium units or apartments in high-rise buildings and houses, but not actually land. Foreigners can get around this issue by using long-leaseholds.

• Prices:

The Philippines property market is experiencing a growth spurt like Cambodia, coming in as a close second in economic viability. 

Notable Areas:

• Davao City
• Boracay
• Bohol
• Palawan
• Samal Island
• Marinduque
• Batanes
• Panay
• Negros
• Cebu
• Mindoro

At Engel and Volkers Hong Kong, we pride ourselves on being one of the best property estate agents, especially in luxury homes, in the world. If you are in need of finding a local real estate agent or simply wanting help in finding Hong Kong property for sale, please reach out to us so we can connect you with one of our best real estate agents to assist or search residential properties for you. 

Interested in living at or investing in a property in Hong Kong? For more information about apartments for sale in Hong Kong or real estate investing in Hong Kong, contact our real estate agents in Hong Kong at Engel & Volkers for more information and viewings of the luxury homes and apartments for sale and rental. 

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