![](\"http:\/\/i2.wp.com\/www.siamlandbank.com\/propertynews\/wp-content\/uploads\/2016\/01\/ASEAN.png?fit=740%2C493\")
\nA number of benefits and hurdles face the property sector as the ASEAN Economic Community commences<\/p>\n
\nA number of benefits and hurdles face the property sector as the ASEAN Economic Community commences<\/p>\n
There\u2019s no turning back now.
A number of benefits and hurdles face the property sector as the ASEAN Economic Community...<\/p>\n","protected":false},"author":1,"featured_media":1585,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[1],"tags":[],"class_list":["post-1584","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property-news"],"jetpack_featured_media_url":"https:\/\/i1.wp.com\/www.siamlandbank.com\/propertynews\/wp-content\/uploads\/2016\/01\/ASEAN.png?fit=740%2C493&ssl=1","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p75ss1-py","jetpack-related-posts":[{"id":9960,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/will-asean-integration-be-a-game-changer-for-the-regions-property-markets\/","url_meta":{"origin":1584,"position":0},"title":"Will ASEAN integration be a game-changer for the region\u2019s property markets?","date":"April 5, 2016","format":false,"excerpt":"\r There\u2019s strength in union ASEAN single market is finally a reality After years of anticipation and delay when it seemed it might never happen, the seventh largest single economic market in the world was inaugurated as 2015 drew its last breath. 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\nOn 31 December 2015, the ASEAN Economic Community (AEC) was formally established, which saw its 10-member countries form a single economic bloc. Electronic ads about the AEC can be found all over Asia.
\nThe integration\u00a0of ASEAN (Association of South East Nations) will surely impact the property markets across the region, among other industries, supported by the forward-thinking AEC Blueprint 2025.
\nAEC, explains the Jakarta Post, has four key characteristics: 1) it is a single market and production base; 2) it is a highly competitive economic region; 3) it is a region of fair economic development; and 4) it is a region fully integrated into the global economy.
\nAs the member-states find their footing in this new economic set-up, let us weigh the benefits and compare them with the challenges of the AEC.
\nLet\u2019s begin with the challenges:
\nSome markets still need more transparency\u00a0
\nGlobal consultancy firm CBRE\u2019s \u2018ASEAN Economic Community: A boost to South East\u00a0Asian real estate\u2018 noted that conducting business in each member country is different. While it\u2019s generally transparent and relatively easy in to do business in Singapore and Malaysia, other countries like Myanmar, Lao and Cambodia have a lot of catching up to do in terms of creating a more conducive environment for businesses.
\nMore: In case you haven\u2019t heard, this was ASEAN\u2019s hottest property market in 2015
\nLack of skilled labour
\nIn 2015, CBRE highlighted the possibility of an ill-managed institutional supply pipeline, which has the potential to make retail rents volatile and deter retailers from significant expansion in the region.
\nThe\u00a0lack of skilled labour poses a challenge to the office and industrial sectors, threatening to hamper the sectors\u2019 expansion in the region. Disparity between skill sets across the member states is also apparent and could limit the positive effects from the \u2018free flow of skilled labour\u2019 initiative of ASEAN. The services industry may take a wait-and-see approach as they observe how ASEAN deals with ensuring the development of more skilled labour, which will slow the speed at which industrial and office markets could take off.
\nPro-investment policy issues\u00a0
\nThere is also a lack of complementary real estate policies in the region to encourage investment and the free flow of capital. Restrictions on foreign land ownership and short lease durations in many of the member states deter real estate investors from making purchases in the region.
\nCBRE suggests a pro-investment environment is necessary to ramp up Foreign Direct Investment even further and improve the development landscape in the region.
\nRestrictive ownership policies
\nHow can ASEAN markets attain a pro-investment approach? CBRE suggests an extensive\u00a0review of each member state\u2019s land ownership policy with regard to foreign property investment. Extending lease ownerships could also work in favour of some markets, which is something that authorities could explore.
\nAlthough it\u2019s easier said than done, especially in a large, combined market covering hundreds of millions of citizens, the liberalisation of individual markets could prove beneficial for the each member state.
\nMore: How economic integration will push urban growth renewal in ASEAN
\nDesmond Sim, CBRE head of research for Singapore and Southeast Asia, believes that the AEC plays a key role in the progress of the real estate industry.
\nNow let\u2019s go through the positive impact that the new economic bloc can bring:
\nASEAN\u2019s demography is an attractive prospect for business
\nThe region is currently home to 625 million people and expected to increase to 690 million by the end of 2024. Economically, an integrated ASEAN market is a notable force. If treated as a collective, the estimated combined Gross Domestic Product (GDP) for ASEAN in 2014 would have been USD2.519 trillion, making it the seventh largest economy globally.
\nLogical logistics
\nWith the inevitable establishment of more Small-and-Medium Enterprises (SME) and large, multinational corporations in the region, CBRE expects an increase in demand and supply for industrial and office space across most markets.
\nThe logistics market, in particular, is expected to grow exponentially with the development of ASEAN given the AEC\u2019s emphasis on enhancing infrastructure and regional cooperation in a bid to attract more visitors.
\nMore: 2016 emerging market predictions from Lamudi\u2019s global co-founder
\nIncrease in inbound and cross-border investment
\nASEAN has a strong track record when it comes to attracting real estate capital inflows despite often restrictive foreign ownership policies and this is expected to continue with the dawn\u00a0of integration. The past decade has seen impressive growth in real estate investment in the region \u2013 a total of USD28.190 billion in capital inflows was recorded between 2005 and 2014. With the increase in cross-border investments has also come a shift in global capital distribution across all ASEAN countries in recent years, claims CBRE.
\nDiversity\u00a0leads to dynamism\u00a0
\n\u201cThe diversity in the development of the real estate markets in ASEAN provides investors a broader investible universe for their investment strategies,\u201d explains CBRE\u2019s Sim. \u201cInvestments into ASEAN real estate market is thus expected to grow as investors seek alternative markets for their real estate portfolios.\u201d
\nTourism is key
\nAs always, tourism will be an important player for the growth of emerging markets in the region. CBRE notes that the regional cooperation brought about by the AEC could certainly\u00a0enhance air and land transport infrastructure in each market, attracting more tourist arrivals and widening the net for potential investors.
\nNow read: Southeast Asia\u2019s key property markets are undergoing a period of transition
\n
\nSource : property-report.com
\nRead more…What to expect in real estate as the AEC era begins<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"