AIAIG Overseas Real Estate Investment Weekly Report｜2025 Week 49 (Part 1): Real Estate Policies and Overseas Home Buying Information

AIAIG Overseas Real Estate Investment Weekly Report｜2025 Week 49 (Part 1): Real Estate Policies and Overseas Home Buying Information - AIAIG - AIAIG

Question

What notable policy developments have emerged recently in Malaysia regarding housing and development models?

AIAIGAnswer

This week, discussions around the "Build-Then-Sell" (BTS) model in Malaysia continue to heat up. Key points include:

1. Clear government stance:
- The Ministry of Housing and Local Government has proposed accelerating the transition from the traditional "Sell-Then-Build" (STB) to "Build-Then-Sell" (BTS) during the Thirteenth Malaysia Plan (RMK13);
- One policy goal is to quickly clear long-stalled projects and protect buyers who have paid but not received their homes.
2. Focus on the BTS 10:90 model:
- The typical design is "buyers pay 10% first, and after the developer completes construction and obtains a completion certificate, buyers pay the remaining 90%";
- During this period, buyers do not need to pay mortgage interest for undelivered homes, significantly reducing the impact of stalled project risks on personal household finances.
3. Incentives and pressures coexist for developers:
- Developers adopting BTS may receive incentives in taxes, financing, and approvals;
- However, this also means developers need more own capital or bank development loans, potentially leading to the elimination or forced mergers of small and medium-sized developers with insufficient financial strength.

Question

What does the BTS model mean for Chinese investors planning to buy property in Malaysia?

AIAIGAnswer

From an investor's perspective, the BTS model brings a rearrangement of the "risk structure":

1. Direct benefits for individual buyers:
- The biggest advantage is a significant reduction in stalled project risks: you only pay a small deposit, with most of the balance paid only after the physical home is completed and passes inspection;
- Cash flow pressure becomes more manageable, and household balance sheet predictability is stronger.
2. Impact on investment return timing:
- Under the traditional STB model, some investors achieved short-term gains through early subscription and price increases during the construction period;
- In the BTS model, since prices are often fully locked in near completion, the space for short-term "pre-construction arbitrage" is compressed, which is more favorable for owner-occupiers and medium- to long-term investors.
3. Adjustment in property selection strategy:
- In the future, more attention should be paid to developers' financial strength, reputation of completed projects, and government-collaborated urban renewal projects;
- Renewal-type projects located along subway or light rail lines, driven by both "risk reduction and facility upgrades," are more likely to outperform traditional suburban properties in both rental and sales aspects.

Question

How will Malaysia's policies on urban renewal and stalled project management change the local real estate investment landscape?

AIAIGAnswer

This change can be understood from three levels:

1. Regional level:
- Areas in major cities with many old communities and stalled projects will see opportunities for "demolition and reconstruction" and infrastructure upgrades;
- For investors, this means that previously overlooked old districts may "turn around" within 5–10 years, but project selection and timing windows are crucial.
2. Product structure level:
- Developers will tend to launch more standardized, medium-priced, and easily marketable products to reduce capital occupancy and market absorption pressure;
- Ultra-high-priced, large-scale, and vaguely positioned projects are more likely to be neglected by the market.
3. Foreign investment participation level:
- For Chinese investors, the combination of BTS and urban renewal is suitable for asset allocation based on the logic of "improved living + long-term rental";
- If the goal is to quickly profit through early subscription and price increases during the construction period, the policy environment is becoming increasingly unfavorable.

Question

What are the current real estate tax and fee incentives in Thailand that are still in effect or have ongoing impact?

AIAIGAnswer

Since 2024, the Thai government has repeatedly reduced the transfer and mortgage registration fees related to ordinary residents' home purchases and continued to extend and refine some measures in 2025. The core content can be summarized as:

1. Significant reduction in transfer and mortgage registration fees:
- For eligible residential properties (with prices and official assessed values within certain upper limits, and the buyer being a natural person, etc.), the transfer registration fee has been reduced from the traditional 2% to a symbolic 0.01%;
- The mortgage registration fee has been reduced from 1% to 0.01%, significantly lowering transaction costs for first-time buyers and those upgrading.
2. Supporting mortgage and macro policies:
- The loan-to-value (LTV) ratio control has been temporarily relaxed, allowing residents to purchase homes with higher leverage under certain conditions;
- Policy interest rates are maintained in a relatively moderate range, keeping actual mortgage costs within an affordable scope.
3. Aimed at supporting domestic demand:
- Against the backdrop of fluctuations in tourism and exports and uncertain external demand, Thailand hopes to provide stable support for the economy by stimulating local residents' home purchases and related industry investments.

Question

How much direct help do these incentives provide to Chinese buyers?

AIAIGAnswer

An important distinction needs to be made:

1. Tax and fee reductions mainly target Thai local residents:
- Many 0.01% fee policies explicitly require the buyer to be a Thai natural person and the property price not to exceed a certain upper limit;
- For general Chinese buyers, opportunities to directly enjoy the same rates are limited, and specific project and local implementation details need to be verified.
2. However, "indirect benefits" are quite significant:
- After local rigid demand is activated, the overall market absorption rate accelerates, helping to digest inventory and support prices in mainstream sectors;
- For projects targeting local residents for rental or future resale, the recovery in local demand means improved liquidity and easier renting or selling.
3. Strategic implications for Chinese buyers:
- If your goal is "to rent the house to Thai local families or young white-collar workers," then such policies are clearly beneficial as they boost the overall market temperature;
- If you are more concerned about "whether your own holding costs can be reduced to a minimum," you need to accept the reality: most tax and fee incentives are not tailored for foreign buyers.

Question

In such a policy context, which city sectors in Thailand are currently more worth paying attention to?

AIAIGAnswer

Combining taxes and fees, demand, and medium- to long-term planning, three types of regions can be focused on:

1. Mid-range apartments along Bangkok's rail transit lines, especially near interchange stations:
- Local office workers and the new middle class are the main customer groups, benefiting the most from mortgage and tax policies;
- Suitable for Chinese investors focusing on long-term holding and stable rental income.
2. Residential and commercial-residential projects in cities related to the Eastern Economic Corridor (EEC):
- Industrial parks, ports, and infrastructure projects continue to advance, bringing stable employment and an influx of population;
- Suitable for investors who value the dual drivers of "industry + population."
3. Self-use/vacation-type properties in core areas of traditional tourist cities:
- In places like Pattaya and Chiang Mai, short-term rental and vacation demand has rebounded after tourism recovery;
- Such assets may have greater price volatility but combine self-use attributes with rental options.

Question

What are the new developments in Japan regarding the 'registration of buyer nationality' issue this week?

AIAIGAnswer

By early December 2025, Japan's discussion on 'registration of buyer nationality' has progressed from the conceptual level to the system design stage:

1. Government departments have clarified the objectives:
- To establish a national database that can centrally monitor the status of foreign ownership of Japanese real estate;
- By recording buyer nationality in real estate registration, it provides foundational data for analyzing the impact of foreign capital on housing prices, speculative activities, and land holdings in sensitive areas.
2. The expected implementation timeline has been further refined:
- According to recent public information, the launch of the relevant database system is targeted for the fiscal year 2027 or later, indicating that this is a medium- to long-term, systematic project, rather than a temporary measure that will 'suddenly be implemented within a few months.'
3. Linkage with other regulatory tools:
- The Ministry of Land, Infrastructure, Transport and Tourism and the Digital Agency are discussing how to integrate nationality information with existing land use surveys and security-related legal tools;
- In the future, more detailed control measures may be superimposed in 'overheated housing price areas' and 'military and infrastructure-sensitive areas.'

Question

Will this system immediately affect foreigners (including Chinese buyers) purchasing property in Japan?

AIAIGAnswer

In the short term, this system will not immediately change the issue of 'whether one can buy,' but it will change the issue of 'how purchases are viewed afterward':

1. Current stage:
- Most cities and property types are still open for purchase by foreigners;
- Buyers are not yet required to declare their nationality during the transfer registration process, and the daily transaction procedures remain largely unchanged compared to the past.
2. Medium-term outlook (after the system is launched):
- Your nationality information will be recorded as a field in the registry and aggregated into the national database;
- The government and research institutions will be able to clearly statistics on the proportion and behavioral characteristics (such as holding periods, resale frequency, etc.) of foreign buyers (including Chinese buyers) in specific cities, price ranges, and areas.
3. Practical impact on Chinese buyers:
- Normal purchases for self-occupation or long-term rental investments can still continue after the system is implemented, but the 'degree of anonymity' will decrease;
- Investment models focused on short-term frequent buying and selling, high-leverage speculation, or concentrated deployment in sensitive areas are significantly more likely to be singled out by policies in the future.

Question

How should Chinese investors respond to this policy direction when considering Japanese real estate?

AIAIGAnswer

Strategically, adjustments can be made in three aspects:

1. Accept the new norm of 'transparency' in advance:
- No longer prioritize 'whether one can hide behind a Japanese corporation or intermediate holding structure' as the primary consideration;
- More importantly, focus on the property's location, rental demand, cash flow stability, and compliance of the tax structure.
2. Proactively reduce short-term speculation and concentrated deployment in sensitive areas:
- Minimize behaviors such as rapid resale within a year or concentrated purchases in a few extremely hot areas;
- A more suitable approach is to hold self-occupation/rental apartments in core commuting areas, enjoying stable rents and moderate appreciation.
3. Incorporate policy and public opinion risks into profit calculations:
- When building ROI models, include stress test scenarios for 'future tax increases and restrictions targeting foreigners or short-term speculation';
- When selecting properties, prioritize areas that are friendly to self-occupation demand and have diverse tenant sources, rather than relying entirely on speculative sectors dependent on foreign investors for resale.

Question

How is the overall heat of the Dubai real estate market at the end of 2025?

AIAIGAnswer

As of the fourth quarter of 2025, the Dubai real estate market continues to operate at a high level:

1. High transaction volume and value:
- In the first nine months of this year, the cumulative number of real estate transactions and total transaction value in Dubai have significantly increased compared to the previous year, indicating continuous capital inflow;
- Large-scale transactions and high-end villa and apartment projects frequently make headlines, showing that interest from high-net-worth individuals remains strong.
2. Sector differentiation but overall prosperity:
- Price increases in waterfront areas, core business districts, and mature communities are more stable;
- Emerging sectors and peripheral areas attract yield-seeking investors with higher rental returns.
3. Considered "one of the global safe havens":
- Against the backdrop of tightening immigration and tax systems in many countries and rising global geopolitical uncertainty, Dubai continues to attract incremental capital from Asia, Europe, and other regions due to its low tax burden, stable currency, and infrastructure advantages.

Question

What notable changes have occurred recently in visa and residency policies in Dubai and surrounding countries?

AIAIGAnswer

An important signal related to Chinese buyers this week is that the Gulf region continues to attract medium- to long-term capital by adjusting the thresholds for golden visas:

1. Dubai's own golden visa and long-term residency policies:
- Based on real estate investments above a certain amount, applicants can obtain long-term residency qualifications, with additional benefits for family members and business operations;
- Recently, there has been no significant tightening in visa approval and renewal processes; instead, there has been more optimization of procedures and online experiences.
2. Follow-up by surrounding Gulf countries:
- Some countries have lowered the minimum real estate investment required for golden visas, aiming to expand the pool of eligible investors;
- This has created a regional competition pattern of "who is more friendly," indirectly raising the attention of Gulf real estate as an asset class.
3. Implications for investors:
- Real estate is no longer just a pure asset but a comprehensive tool tied to long-term residency and identity planning;
- Especially for Chinese high-net-worth clients looking to establish offshore family offices and conduct cross-border asset allocation, the attractiveness of Dubai and surrounding areas has significantly increased.

Question

Under high heat and high expectations, what risks should be particularly vigilant about in Dubai real estate?

AIAIGAnswer

The main risks can be summarized into three categories:

1. Cycle and volatility risk:
- The Dubai market has historically experienced significant upswings and downturns; investors entering at high points need to be mentally prepared for net value fluctuations;
- When global interest rates, oil prices, and regional geopolitics change unfavorably, transaction activity may cool down quickly.
2. Overly optimistic expectation risk:
- Some promotional materials exaggerate long-term rental returns and appreciation potential without fully disclosing vacancy, maintenance, and management costs;
- Investors who only look at nominal yields while ignoring holding costs and liquidity may overestimate actual returns.
3. Legal and compliance detail risk:
- There are significant differences in property types (freehold vs. long-term lease), development progress, and escrow arrangements across different communities and projects;
- It is recommended to always verify project documents and developer backgrounds through qualified lawyers and licensed agents to avoid pitfalls in contract terms, property management, and cost-sharing.

Question

Based on all the information from this week, how can Chinese buyers fine-tune their investment strategies in Southeast Asia, Japan, and Dubai?

AIAIGAnswer

From the information in Week 49, the following comprehensive strategic recommendations can be made:

1. In Southeast Asia, focus on countries and cities where "the system is becoming more protective of buyers":
- Malaysia's build-then-sell and urban renewal projects are suitable for families who want to minimize the risk of unfinished projects and prefer medium- to long-term holdings;
- Thailand's policy support in taxes and mortgages benefits investment logic that plans to cover part of the mortgage through local tenants.
2. In Japan, shift the perspective from "cheap + short-term speculation" to "transparent + long-term cash flow":
- The upcoming nationality registration system means that models attempting short-term arbitrage through hidden structures are becoming increasingly difficult;
- A more appropriate approach is to choose apartments in core commuting areas with stable rental demand and plan holdings from a 7–10 year perspective.
3. In Dubai, design "identity and assets" as an integrated whole:
- Consider real estate investment in conjunction with golden visas, family residency, and corporate layout, rather than focusing solely on the short-term returns of a single project;
- Control concentration of positions, avoiding putting all overseas assets in a single city or currency.

Question

If only one most important risk warning could be given for this week, what would it be?

AIAIGAnswer

The most important risk warning for this week can be summarized as: Major global destinations are increasingly concerned about "who is buying property" and "the nature of the funds behind the purchase."

Whether it's Malaysia restructuring its system to keep more risks on the developer side, Japan using nationality registration and actual condition surveys to understand the proportion of foreign capital, or Dubai and the Gulf using golden visa thresholds to screen for long-term funds—all indicate one fact:

- Overseas real estate markets are no longer completely rough, information-opaque "arbitrage zones";
- Your identity, source of funds, holding period, and asset usage will increasingly come under the scrutiny of regulators.

Therefore, rather than chasing short-term trends, use the policy context provided by such weekly reports to help build a more stable global asset and identity portfolio: less reliance on luck, more patience and advance planning.

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AIAIG Overseas Real Estate Investment Weekly Report | 2025 Week 49 (Part 2): Global Market Review and Future Outlook