One day, you might wake up to find that the new neighbour that has just moved in next door is a Japanese couple who has retired, and looking forward to a happy retirement in beautiful Malaysia.

That would be a reality if this feature article by foreign news agency Reuters is anything to go by. The new trend of wealthy Japanese retirees looking for somewhere with lower cost of living but still maintain the kind of lifestyle they have always enjoyed, is hard to ignore.

Read on, if you want to know more how this new niche market could impact you as a property investor in Southeast Asia in general and in Malaysia in particular.

Cheap S.E. Asia property lures Japanese retirees
By Viparat Jantraprap

BANGKOK, Dec 27 (Reuters) - Southeast Asian developers are targeting Japanese retirees, hoping the lure of cheap homes and health care will create a profitable new niche market.

Although Australia’s Gold Coast and Hawaii have been favoured destinations for Japanese in the past, Thailand, the Philippines and Malaysia are now promoting competing “long stay” programmes, offering foreign retirees visas and tax breaks.

Home builders are hoping today’s trickle — just one in 3,000 Japanese pensioners live abroad — becomes a steady flow because over-50s hold 75 percent of Japan’s individual wealth.

In the Philippines — which wants to attract nearly a million foreign retirees by 2015, creating 4 million related jobs — Robinson Land Corp plans to build houses for Japanese who are more used to cramped apartments.

“A government is selling the Philippines as a retirement destination, so we’re looking at building leisure retirement villas,” Robinson Land President Frederick Go said at a recent conference in Hong Kong.

“For $100,000 you can really own a palace in the Philippines.”

As well as health care, developers are laying on special activities. For example, the Philslife Orchid Hills Club, near Manila, runs a website in Japanese (www.philslife.jp), promoting pastimes including organic food cultivation, cattle rearing, ballroom dancing, stargazing and cockfighting.

In Thailand, developers LPN Development PCL, Charn Issara PCL and Quality Houses PCL are building in a thriving “little Tokyo” in central Bangkok, an area popular with the 30,000 Japanese expatriates living in Thailand.

“AFFORDABLE”

Some staff of Japanese firms, such as car makers Toyota Motor Corp. and Honda Motor Co., which have made Thailand a production hub, want to bring over retired relatives.

A Bangkok apartment is typically a third the price of the equivalent in Tokyo.

“It’s affordable,” said Rei Yamamoto, 30, who works for a Japanese software firm in Bangkok. “I decided to buy because my mother wants to spend her vacations here in the future.”

The average pension in Japan is about $1,500 a month for men and $690 for women. But in an effort to head off a crisis, Japan passed a law in 2000 to cut private-sector pension payments and raise the age at which people can receive pensions to 65 from 60.

Retired banker Kou Oikawa, 62, said elderly Japanese had a comfortable life in Thailand because of its cheap hospitals.

Thai hospitals Bangkok Dusit Medical Services and Bumrungrad Hospital are competing for “health tourism” business with the likes of Singapore’s The Raffles Medical Group and Malaysia’s KPJ Healthcare Sdn Bhd.

The average cost to an insurer for a hip replacement operation in Thailand and Singapore is US$12,000, according to medical tourism firm Planet Hospital. In Japan, costs for the procedure can mount to US$17,000.

“I feel Thais are good friends to Japanese,” Oikawa said.

Oikawa knows a baby boom after World War Two, followed by a drop in the birth rate, means millions will join him in retirement over the next decade.

Some estimates show Japan will have one person over 65 to every two of working age by 2025, a higher dependency ratio than any other major industrialised nation. Now pensioners make
up nearly a quarter of the 127 million population.

SCAMS

But high-profile scams could put many retirees off.

In December, six elderly Japanese filed a lawsuit in the Tokyo district court against a firm saying it reneged on promises to provide land for homes on the Philippine island of Cebu.

The plaintiffs, some in their seventies, said they had paid up to 9 million yen ($76,210).

But instead of dream homes with one-on-one health care, they found empty, rubbish strewn plots, according to Japanese media reports. When one tried to build a house, he found the
consultancy firm had no land titles.

One 73-year-old retiree was quoted by Kyodo news agency saying he wanted to “sound the alarm that there are some shady deals involving the retirement business”.

But Southeast Asian governments hope their incentives will be enough to win over foreign retirees. Malaysia has been at the forefront of the region’s efforts, launching in 1996 a “silver hair” scheme, now called the “Malaysia my second home” programme.

In the last four years, nearly 10,000 people have taken advantage of Malaysia’s package of a 10-year renewable multiple entry visa, tax exemption on pensions, a waiver of import and sales tax for vehicles, and permission to import domestic staff.

Developers such as MK Land Holding Bhd and Country Heights Holding Bhd could get a boost if the government goes ahead with plans to make a property purchase of at least 250,000 ringgit
($71,400) a qualification requirement.

In Thailand, LPN Development is reporting brisk sales to Japanese buyers at two of its Bangkok buildings, where a 100 square metres (1,076 square foot) sells for up to $184,700.

Property investment is exempt from the capital control measures introduced last week to halt appreciation of the baht currency.

This year’s bloodless military coup had no impact on enthusiasm for the properties, according to LPN managing director Apas Sripayak.

“The locations have led to the strong demand,” Apas said, citing the proximity of hospitals and Japanese restaurants.
($1=36.36 Baht)
($1=118.94 Yen)
(Additional reporting by Dominic Whiting in Hong Kong) - REUTERS

I guess this is great news to foreigners who has been waiting on the sidelines to enter the property market in Malaysia.

Lucrative as it seems, the government has finally opened the door to welcome foreign ownership in properties in Malaysia, where previously, the real estate has been guarded jealously.

Previously, foreign ownership of properties was introduced via the Malaysia My Second Home Programme and the owner has to stay in the property they own.

Now, with this new relaxation in rules, foreigners no longer need to be restricted in the number of properties they can own and for what purpose, provided of course, they buy properties worth above RM 250,000.

Below is the news from wires, foreign news agency Agence France Presse and local news agency, Bernama.

__________________

Malaysia relaxes foreign ownership property rules to woo investors

KUALA LUMPUR, Dec 20, 2006 (AFP) - Malaysia on Wednesday said it will allow
foreign nationals to buy residential properties worth more than 250,000 ringgit
(71,429 dollars) without approval in order to attract investors.

Under current rules, foreigners who want to invest in Malaysia’s property
market have to get approval from the government’s Economic Planning Unit for
properties valued at 250,000 ringgit and above.

“The new step is aimed at drawing foreign investors to buy residential
units in the high-end category and is expected to bring about positive changes
to the property and construction sectors,” said a statement from the prime
minister’s office.

“The increase of investments in the property sector by foreign investors
will also increase the inflow of foreign currency exchange,” it added.

Malaysia has been aggressively seeking greater foreign investment, and
Second Finance Minister Nor Mohamed Yakcop said cutting back on bureaucracy for
approvals was proof of its commitment.

“We are making it easy for them to buy high-end residential properties and
we mean it,” he was quoted as saying by the state Bernama news agency.

He said the government was cutting back on red tape to boost the flow of
foreign direct investment and revive the ailing property sector, which has been
facing a housing glut.

Nor Mohamed also said foreign investors were likely to take up properties
at the higher end of the market, at values of between 700,000 to 900,000
ringgit.

The ruling will be effective from Thursday December 21 and will not have
any conditions on the usage of the property or the limit of units to be
purchased, it said. - AFP

_________________

FOREIGNERS CAN BUY HOUSES OVER RM250,000 WITHOUT FIC’S APPROVAL

PUTRAJAYA, Dec 20 (Bernama) — Foreign nationals will be allowed to buy
residential properties worth more than RM250,000 per unit without needing
approval from the Foreign Investment Committee of the Economic Planning
Unit in the Prime Minister’s Department.

In addition, the condition of usage and the limit of units to be
purchased will not be imposed, a statement from the Prime Minister’s Office
said today.

It said the new ruling takes effect from Dec 21, 2006.

“The government always seek initiatives to reduce bureaucracy and to
generate economic growth,” it said.

The statement added that the new step is aimed at encouraging foreign
investors to buy residential units in the high-end category and is expected
to bring about positive changes to the property and construction sectors.

“Apart from that, the increase of investments in the property sector by
foreign investors will also enhance the inflow of foreign currency
exchange,” the statement added. — BERNAMA

http://www.bernama.com/bernama/v3/news_business.php?id=237550

What is the main driving force behind Malaysia’s property market? Residential properties, or in other words, houses, apartments and condominiums.

At least that was what the officials said, as what was reported by Malaysia news agency, Bernama.

Below is the full article.
______________

KUALA LUMPUR, Dec 5 (Bernama) — The Malaysian residential property

market continues to drive growth in the property market, Second Finance

Minister Tan Sri Nor Mohamed Yakcop said today.

“It accounts for almost two thirds of total volume and half of total

value of transactions of almost RM14 billion during the first half of this

year,” Nor Mohamed said.

“We have also seen increases in housing starts and planned supply,

reflecting improvements in market confidence,” he said at the “Country

Heights Innovation in Property Investment” gala night here.

Nor Mohamed said the government’s policy on housing development

programmes has always been focused on the need to ensure that Malaysians in

all income groups have access to adequate, quality and affordable homes.

Emphasis is also given on ensuring appropriate locations for housing,

particularly for low and medium cost housing, as well as the provision of

sufficient public amenities to create a conducive living environment for

home buyers and their families, he said.

The Ninth Malaysia Plan has estimated that new housing requirements

during the plan period will total more than 700,000 units.

“Of this, some 38 percent will be for the low-medium cost houses, while

the balance 62 percent for the medium and high-end homes,” Nor Mohamed

said.

The plan also envisaged that the private sector would play the lead

role in meeting the nation’s housing requirements, he said.

“The government, on its part, will continue to provide the necessary

support to facilitate the private sector to meet the target,” he added.

Nor Mohamed said the government’s efforts at improving the delivery

system in the housing sector has focused on several initiatives.

The recent introduction of the build-and-sell approach for sales of

residential units aimed to reduce the risks to house buyers of incomplete

and abandoned housing schemes, which presently, clearly placed house buyers

at a disadvantage, he said.

He also said that to further promote sales of higher end properties to

foreign purchasers in line with “Malaysia: My Second Home” programme, the

government has further relaxed home ownership rules for foreigners.

Foreign acquisitions of residential properties of more than RM250,000

per unit no longer required the approval of the Foreign Investment

Committee, he added. — BERNAMA

Well well, its been more than 2 months since my partner and I put in to paper on the booking form. Where are we now?

Well, the S&P signing have not commenced yet. Apparently the developer is still tied up with the local authorities. I have yet to contact the developers to get an updae on this.

On the other side, my loan applications has been approved. The interest rates, well I would say pretty competitive. The bank is currently waiting for the S&P sigining before agreeing to issue the “letter of offer”.

At the construction site, well construction is still ongoing at a frantic pace. I visited the site a week ago, I daresay the developer has already put up almost 6 new 3-storey semi-d albeit without any furnishing yet. But then again the structure is up

Thats all the update for now.