The Southeast Asian real estate market is undergoing significant fluctuations and new trends in 2024. In particular, Singapore stands out with the development of high-end properties, attracting the attention of international investors. Reports and studies from Christie’s International Real Estate indicate that the construction of projects such as Good Class Bungalows, which are experiencing rising values, has become a concrete testament to the attractiveness of this market. Additionally, demand for industrial and retail properties (shophouses) is also increasing sharply, especially in countries like Vietnam and Thailand. With the diversity of real estate forms and customer groups, the Southeast Asian market promises to offer many opportunities and challenges for investors.

Market Trends in Southeast Asian Real Estate: A Bright Revival

Southeast Asia is a rapidly developing region, with many countries recording impressive GDP growth in recent years. According to reports from the International Monetary Fund (IMF), the average economic growth rate of the region in 2023 is about 5%, with Vietnam, Thailand, and Indonesia showing positive signs. The economic recovery following the COVID-19 pandemic, along with strong urbanization trends, has boosted demand for real estate.

The real estate market in Southeast Asia is witnessing new trends in 2024. According to financial experts’ predictions, the subregion is expected to recover from mid-2024 after a bleak year in 2023 due to high interest rates and geopolitical tensions. Additionally, the news that Christie’s International Real Estate has officially launched in Singapore and Vietnam marks an important step in its expansion strategy in Southeast Asia.

Christie’s International Real Estate chose Singapore for its role as a global financial center and also as the leading real estate market in Southeast Asia. According to Christie’s International Real Estate Singapore report, the prices of luxury residential properties in Singapore rose by 8% in the first half of 2023, reaching an average price of SGD 3.5 million for luxury apartments. The demand for high-end real estate here primarily comes from international investors, particularly from China and Hong Kong.

Singapore is notable for high-end properties such as Good Class Bungalows (GCBs), with values ranging from SGD 35 million to SGD 65 million (USD 26.8 million to USD 49.7 million). Notable projects like 32 Gilstead and Kew Lodge also demonstrate the increasing land values in central areas.

With the influence of the digital transformation wave and advanced technological solutions, the Southeast Asian real estate market is no exception. According to a survey by JLL, 60% of major real estate companies in Singapore have been adopting AI and big data technology to predict price trends, manage assets, and optimize investments. Online real estate platforms are also becoming increasingly popular, making it easier for clients to search and transact.

To better understand the development of the Southeast Asian real estate market, we need to examine the current key trends and how they directly impact prominent real estate types in the region. The post-pandemic economic boom, rapid urbanization rates, and increasing demand from both domestic and international clients have created a rich and diverse market landscape. These factors have propelled the development of various real estate forms, from luxury housing to commercial and resort properties, meeting the increasingly complex needs of buyers and investors.

Prominent Real Estate Forms in the Southeast Asian Market

The Southeast Asian real estate market is highly diverse with many different forms, from residential, office, to industrial and retail properties. Some prominent forms include:

Luxury Residential Real Estate

Major cities in Southeast Asia like Bangkok, Kuala Lumpur, Hanoi, and Singapore all have a thriving luxury residential real estate segment. The demand primarily comes from the upper class and foreign investors. Notable projects include luxury apartments and lavish villas equipped with amenities like swimming pools, gyms, and private butlers.

In Singapore, luxury apartment projects in the Marina Bay and Orchard Road areas are recording average prices ranging from SGD 5,000 to SGD 6,500 per square meter, with an annual growth rate of 6-8%, according to Christie’s International Real Estate.

Commercial Real Estate (Shophouses)

The commercial real estate market in Southeast Asia is also growing robustly, with office buildings and shopping centers rising everywhere. Cities like Kuala Lumpur, Bangkok, and Ho Chi Minh City have become major commercial hubs in the region, attracting international businesses and multinational corporations to set up offices.

The rental prices for Grade A office space in Ho Chi Minh City increased by 10% over the past year, reaching an average of USD 50 per square meter per month, while in Bangkok, the average price is USD 35 per square meter per month.

Resort Real Estate

Resort properties are a segment attracting particular interest from investors, especially in popular tourist destinations like Bali, Phuket, Nha Trang, and Da Nang. Luxurious beachfront resort projects and uniquely designed villas not only serve tourists but also represent long-term investment opportunities.

In Phuket, the average price for a high-end resort villa ranges from USD 5 million to USD 10 million, according to a report by Knight Frank. This development is based on the potential for tourism growth and the trend of owning a second home among the international elite.

Industrial Real Estate

Industrial real estate is becoming a new trend in countries like Vietnam and Thailand, driven by the shift in global supply chains. Industrial parks and factories are being developed to meet the increasing demand for production and logistics, especially after the pandemic when global businesses seek alternative locations to China.

Rental prices for factory space in major industrial zones in Vietnam, such as Bac Ninh and Binh Duong, increased by an average of 12% in 2022, according to multiple reports.

From luxury housing, commercial real estate, to resort and industrial properties, each segment attracts a specific customer base. To gain a clearer understanding of the market dynamics, we need to analyze who is participating in these transactions—from the growing middle class to international investors and large investment funds, who they are and why they choose Southeast Asia as their investment destination.

Customers in the Southeast Asian Real Estate Market – Who Are They?

We need to recognize that the development of the region has attracted interest from various groups, both domestic and international. Customer groups are not only diverse geographically but also differ in needs, investment goals, and financial capabilities. Thus, identifying who is participating in this market is a crucial step in understanding the trends and growth potential of real estate in the region.

International Customers

Southeast Asia, particularly Singapore and Thailand, is an ideal destination for international real estate investors. According to data from Christie’s International Real Estate, 40% of luxury real estate transactions in Singapore in 2023 came from international clients, with a large portion from China. They often seek to buy properties in Singapore, Thailand, and Vietnam as a means of capital preservation as well as to secure high-quality living accommodations.

Overall, the Southeast Asian real estate market, with highlights such as Singapore, Thailand, and especially Vietnam, is on a strong development path thanks to the increase of the middle class, investment demand from international customers, and interest from large investment funds. With a variety of property types and long-term growth potential, this region promises to continue being an attractive destination for investors. Particularly in Vietnam, coupled with rapid urbanization and government support, real estate is becoming one of the most noteworthy and promising sectors in the region.

Investors, Financial Institutions

Not only individuals but large investment funds and financial institutions are also focusing on Southeast Asian real estate. Funds such as Blackstone, GIC (Singapore), and Temasek have intensified their acquisition of commercial and industrial real estate projects in the region. The political stability and long-term growth potential make Southeast Asia a strategic investment area for major funds.

Luxury Collectors

Finally, we cannot overlook the elite class in the region, particularly in countries like Thailand, Vietnam, and Indonesia. These clients typically seek high-end properties, from penthouses in the city center to beachfront villas.

Reflecting on the overall picture of the Southeast Asian real estate market, with highlights like Singapore, Thailand, and especially Vietnam, it is on a strong development path due to the increase of the middle class, investment demand from international customers, and interest from large investment funds. With a variety of property types and long-term growth potential, this region promises to continue being an attractive destination for investors. Especially in Vietnam, along with rapid urbanization and government support, real estate is becoming one of the most noteworthy and promising sectors in the region.

Source: Christie’s International Real Estate