Manila or Bangkok Property Investment Overview – Which is the Best?

 

So this article can stand the test of time I have excluded the Covid-19 factor from this article because without knowing the date of the end of the Lockdown in both Countries it’s impossible to Factor in but it’s a conversation were having with our Investor clients on a daily basis. However, the old saying “Buy Low Sell Low, Buy High Sell High” springs to mind. So the most important thing is to understand both markets as they have very different fundamentals at this moment in time.

 

The Manila Property Market,

 

In reality if you’re a serious investor Manila property market really means Makati City, Bonifacio Global City and possibly the Mall of Asia and Aseana City area where all the major casinos are located. My personal point of view would be to stick to Makati and BGC.

 

So some outside investment factors you should be aware of is that Makati and BGC combined is the world’s number one BPO and call centre location and is responsible for 50% of the Philippines GDP

 

In relation to property market, its booming going up in value almost every month. To put it in some form of perspective if you had bought an Off Plan Luxury Condo in 2015 you would have paid between $2000 to $3000 Dollars a square meter today you will pay between $5000 and $10,000 a square meter with no sign of the market contracting anytime soon.

 

Around 12 months ago Knight Frank wrote an Article putting Manila as the number One luxury property market rising by price in the world. They measured that as the top 5% of the market. The reason for this is that there really isn’t a lot of high quality good choice luxury properties compare with other capital cities around the world. This is borne out by the fact that Shang Properties Last Autumn launched the most expensive project Aurelia at $10,000 USD per square meter which had a very good uptake indeed even at those prices.

 

There are two negatives on the horizon which no one can factor in at this point. The first being is yields were around 8% net in 2015 and if you buy Aurelia in BGC they are probably under 3%. The second being is partly related to Coronavirus in that will the Chinese continue in their large numbers to relocated here and invest in Philippines property or will they look to relocate to Cambodia or Malaysia. That’s a subject for another article.

 

 

The Bangkok Property Market

 

Bangkok is a city everyone wants to be its number one tourist destination in the world and after Singapore and Hong Kong it’s the business capital of South East Asia. Generally Thai Government is much more open to Foreign Investment than countries like Philippines or Indonesia. There is just a price for foreigners to do business in Thailand.

 

So Thailand as a country has about half the growth of the Philippines and a much higher Median ag of its workforce around 38 years old compared with the Philippines 23. However, the good thing is compared to the Philippines they have much superior infrastructure as they have had many more years of Foreign Investment by being more outward looking.

 

The issue for Bangkok is the complete opposite of Manila it has a large amount of over-supply of high quality condos. Developers has just built too much and it will take some time for that oversupply to be taken from the market. The Flipside is Bangkok has never been made more affordable at all levels and as an Ex-pat you have the choice of wonderful luxury Condos such as Four Seasons, Mandarin Oriental, Ritz Carlton, Kempinski private residences and more.

 

So the negative for Bangkok property market is that it’s unlikely to get the capital growth that Manila is currently experiencing for some time hence why investors have moved to Manila. The Flipside to this is that Bangkok in relation to other markets offers great opportunities and for lifestyle investors has a lot more to offer as somewhere to live.

 

Manila and Bangkok Investment Opportunities

 

So in relation for value for money the world has gone mad and its now the same or cheaper to buy a luxury condo in Bangkok than it is to buy the equivalent one {if it exists) in Manila. A good example with this would be that Exclusive Hot Properties are able to access resale units in The Four Seasons Private Residences on the Chao Phraya River at 10,000 USD or less per square meter the same as Aurelia in BGC, Manila. From a purely lifestyle point of view I know where I would prefer to live.

 

However, if you were to invest in Manila excluding the Covid-19 effect your likely to see higher capital growth but if you buy in Bangkok with a strategic investment strategy your likely to get a much higher yield at around 5% to 6%.

 

Both Bangkok and Manila have similar fundamentals when it comes to property investment and renting out your units in that the yield is driven by a maximum rent the market can take. So the only way to get higher yields is to buy the property at a lower price.

 

So in simple terms with some Caveats my companies’ advice would be invest in Philippines for Capital Growth and Invest in Thailand for Income.

 

 

So Where Should You Invest and Why?

 

My strategy would be to invest in Bangkok Condos with a cherry picking strategy to maximize the highest yield possible and take a five-year view in relation to property prices in that once the excess stock is taken from the market you will start to see real prices rises. However, this strategy is based on holding assets for Income and long term capital growth and that you would be buying at the bottom of the market.

 

In relation to Manila as long as the fundamental stay the same then that would be the best place to invest for capital growth but I believe the best value for money right now is in Bangkok.

 

As always being an International real estate professional I try to be objective and am not tied to any country or product my aim is to be as objective as possible. If you would be interested to know more about the Exclusive Hot Properties investor cherry picking strategy for Bangkok, or would prefer to invest in Manila for capital growth then please feel free to contact me or my team to discuss.