The Western Australian government is considering the development of high rise condominium developments in the north of the state. The concept arose as a political football, the argument being, if the Arab states can do it, why can't Australia. That argument can of course be extended to many countries in Asia which are a lot more central than the Middle East. There are some major problems. The most important being:
1. The lack of an international airport - this is a critical issue
2. The remoteness of the area - the region is far remote from any significant commercial centre
3. The isolation from markets - places like Malaysia, the Philippines and Indonesia are closer to Japan, China, South Korea.
One could take the argument that Australia does offer some advantages over these other countries because it offers more secure Torrens title. But does anyone seriously worry that they won't have a chance to sell property before any threat of property expropriation could arise. If you wait for a dictator to say 'we are nationalising all property' then you have waited too long. But you are not entirely safe in Australia. State governments (say NSW) are prone to place taxes on property because of its value. For this reason I tend to think the sovereign risk concerns are overstated. Also foreign holders of Asian property are not so large, so there will be no mass exodus. There is on the contrary, a seeming consensus on the direction of economic policy.
So where is the best location for high rise condominiums? I can suggest several locations in Asia that are more attractive than the NW of Australia. These include:
1. Davao City, Mindanao, in the Philippines
2. Laoag City, Luzon, in the Philippines
Laoag is particularly attractive because its on the doorstep to China, it has an international airport, with a growing number of connections. It is remote from Manila, but I don't see that as a problem since the regions have a lot to offer.
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Andrew Sheldon www.sheldonthinks.com
1. The lack of an international airport - this is a critical issue
2. The remoteness of the area - the region is far remote from any significant commercial centre
3. The isolation from markets - places like Malaysia, the Philippines and Indonesia are closer to Japan, China, South Korea.
One could take the argument that Australia does offer some advantages over these other countries because it offers more secure Torrens title. But does anyone seriously worry that they won't have a chance to sell property before any threat of property expropriation could arise. If you wait for a dictator to say 'we are nationalising all property' then you have waited too long. But you are not entirely safe in Australia. State governments (say NSW) are prone to place taxes on property because of its value. For this reason I tend to think the sovereign risk concerns are overstated. Also foreign holders of Asian property are not so large, so there will be no mass exodus. There is on the contrary, a seeming consensus on the direction of economic policy.
So where is the best location for high rise condominiums? I can suggest several locations in Asia that are more attractive than the NW of Australia. These include:
1. Davao City, Mindanao, in the Philippines
2. Laoag City, Luzon, in the Philippines
Laoag is particularly attractive because its on the doorstep to China, it has an international airport, with a growing number of connections. It is remote from Manila, but I don't see that as a problem since the regions have a lot to offer.
------------------------------------------------
Andrew Sheldon www.sheldonthinks.com
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