5. A Look at
Japan
Geography
Page 94
Economy and Business
Dependent on imported
raw materials, fossil fuels
Positive trade balance
Unrestricted flow of capital
and financial transactions
Unique to Japanese
business—the Keiretsu
Pages 95-96
Japan’s National Debt
230% of its GDP
Offset by trade
surplus, foreign
currency portfolio
Increasing
consumption tax to
10% by 2015
Investor confidence
Difficult reckoning in
10–20 years?
 Aging population
 Shrinking workforce
 Cost of debt service
 Waning export
competitiveness
Page 96
2011 Disaster
Human tragedy
Lost families, homes, and livelihoods
363,000 buildings completely or partially
destroyed; damage to infrastructure
Most expensive natural disaster in history
A decade to rebuild
Opposition to nuclear power plants
Pages 96-97
Land Lease
Scarcity of land
Many small landholders , small land
parcels
Land lease system
Landowner maintains title to the land
Leaseholder receives the right to
construct and occupy a building on it
Pages 97-98
Can Foreigners Own Real Estate?
No restrictions or conditions
No government permission or approval
Free flow of capital
May establish a operate a business
But….
Mortgage financing obstacles
Pages 98-99
Secondhand Housing
Home values depreciate
Sell at deep discounts
25-year old home has no value
Most rebuilt after 25–30 years
No value in quality construction
Japanese favor new
Previous owner’s bad fortune?
Page 99
Homeownership Trends
Homeownership rate—61%
Small living spaces, condos—45 m2,
single family homes—121 m2
Land prices barometer for new home prices
1 tsubo = two standard tatami mats
(3.3 square meters , 35.5 square feet)
Page 100
Rental Property
Pro-landlord, expensive process
5-7 months rent
Key money—thank you for privilege of
renting
Direct transfer of rent payments from
the tenant’s bank account
Foreign Resident Registration Card
Pages 100-101
Real Estate Professionals
Real estate business
licensing
Sales agent licensing
Ministry for
Construction regulates
commission rates
Page 102
Office Vacancy Rates
Page 103
Top Trends
Despite weak growth, favored country
for real estate investment
Investment in senior housing
Increase of vacancies
Share houses and common living
2020 Olympics
Abenomics
Weakening Yen
Pages 103-104
Beyond the Basics
Names
Initial Contact and
Introductions
Intermediaries
Business
Relationships
Business Cards
Meetings
Demeanor
Negotiations and
Decisions
Social Etiquette
A Few Taboos
Pages 108-112
Building Relationships
Amae
Hada to hada
Nemawashi
Tatemae and honne
Page 109
6. A Look at
India
Geography
Page 116
Modern India
Economic Growth—
surpassing China?
Growing Middle Class
Homeownership—86%
Subsidies and Rising
Commodity Prices
Infrastructure issues
Spreading urbanization,
crowded cities
Pages 117-121
Monsoon Season
Torrential downpours
80% of the annual rainfall
June to August
Beneficial monsoon
season bolsters the
economy
Page 120
FDI
Top FDI Investors in India Top Sectors for FDI
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Mauritius*
Singapore
United Kingdom
Japan
Netherlands
United States
Cyprus*
Germany
France
Switzerland
 18%–Services
 10%–Construction
Development:
Townships, Housing,
Built-Up Infrastructure
 7%–Telecommunications
 6%–Computer hardware
and software
Pages122-123
India Diaspora
Your Next Client?
United States: 2.2 million
Canada: 1 million
U.K.: 1.5 million
S. Africa: 1.2 million
Malaysia: 2 million
Singapore: 590 thousand
Saudi Arabia: 1.7 million
UAE: 1.7 million
Page 123
NRIs and PIOs
Non-Resident Indian
(NRI)
Person of Indian
Origin (PIO)
Overseas Citizen of
India (OCI)
Prime source of
investment in real
estate
Government
encourages ties and
long term
investment
NRI Colonies--fullamenity
communities
Pages 124-125
Why is This Important?
Diaspora pulls
Indians abroad
Career opportunities
Family ties
Immigration
Real estate business
potential
Pages 124-125
Bank Accounts
Determines flow of funds for real estate transactions
Non-Resident Ordinary
Rupee Account (NRO)
 Annual repatriation
limit of US$1million
 RBI approval for
repatriation
Non-Resident External
Account (NRE)
Foreign Currency NonResident Account
(FCNR)
 NRIs only
 NRIs only
 Funds must be from
abroad
 Foreign currency
from abroad
 Government
approval required to
withdraw funds for
real estate purchase
Page 125
Buying Real Estate in India
Indian property law
 Maintain real property ownership by
resident citizens
 Quell speculation
Limit ownership to Indian citizens,
those with family ties
No ownership of agricultural land,
plantation property, or a farm house
Page 126
Crore and Lakh
1 Crore
= 10 Million
1 Lakh =
100,000
Page 126
Transaction Costs
Stamp Tax
Registration Fee
Capital gains tax
Real estate agent fees
Registration
Property tax
Page 127
Foreign Ownership?
Foreign Residents of
Non-Indian Origin
 May purchase a
residence
 Prior-year’s stay of 182
days required plus
proof of intent to reside
in India indefinitely
Non-Residents of NonIndian Origin
 No purchase allowed
 May rent a residential
property
 Maximum 5-year lease
Page 128
Commercial Real Estate
Foreign corporations need Reserve Bank of
India approval to buy or sell real property
Trend toward outlying business park
development
Residential development funded with
foreign capital requires 25 acres of land
Commercial properties minimum 50,000m2
Page 128
Rental Property
Rent-control laws skew rental markets
Apply to leases of 12 months or more
11-month leases common
Serviced apartments provide short
term housing for staff of foreign
companies
Page 129
Real Estate Professionals
States regulate real estate practice
No licensing
Informal channels-homemakers, friends and
relatives, kiosk owners, and janitors
National Association of
Realtors–India
striving for professionalism
nationwide MLS
Pages 129-130
Top Trends
Tremendous growth due to
urbanization, increasing income, and FDI
Benami Transaction Bill
REITs and Commercial Real Estate
Affordable Housing
Senior Living
Pages 130-131
Beyond the Basics
Introductions
Women in Business
Business Cards
Conversation Starters
Meetings
Demeanor
Contracts and Negotiations
A Few Taboos
Social Etiquette
Pages 135-141
7. A Look at
Philippines
Geography
Page 144
Philippine Diaspora
12 million Overseas Filipinos (OF), Overseas
Filipino Workers (OFW)
Workers’ remittances $20.1 billion, 13% of GDP
2nd largest Asian-American group in U.S.
California, Hawaii, Illinois, New Jersey, New
York, Washington, D.C., Texas, and Florida
Median household income of $78,000
Pages 145-146
Philippine Economy
Exports to: China, United States,
Singapore, and Japan
 Agricultural
 Industrial
 Mining
Infrastructure impedes development
outside metro areas
Tourism potential
Pages 146-147
Business Process Outsourcing
Overtaking India
English-speaking workers
Service attitudes
Low wages & office rents
Makati City, Manila, Quezon
City, Cebu City
Driving office space,
residential, retail development
Pages 148-149
Trends
Cloud & Virtual
Workforce
Business Process
Management (BPM)
and Knowledge Process
Outsourcing (KPO)
Disaster Planning and
Business Continuity
Pages 148-149
BERDE
Building for Ecologically Responsive
Design Excellence
Philippine Green Building Council
Local green building rating system
Patterned after LEED
Page 149
Foreign Ownership of Real Estate
Cannot own land
Condos okay if no more than 40% foreign
occupancy
Single-family home okay but not the land
Foreign natural heirs of a Filipino citizen
may inherit, cannot sell to foreigner
Corporations less than 40% foreign
ownership may acquire land
Pages 149-150
Homeownership
Influx of expatriates and retirees
keeps market active
government encourages return of
expatriates, those with family ties
Citizenship Retention and
Reacquisition Act
Special Resident Retiree’s Visa
Page 150
Rental Property
Luxury condos
 2–3 month’s rent deposit
 Rent paid in advance,
post-dated checks
Standard rental
 2 month’s rent deposit
“Customs of the place“
Page 151
Real Estate Professionals
National licensing
Challenge to develop
the real estate
management skills
Chamber of Real Estate
and Builders Association
Page 152
Top Trends
Real estate market growing and prices
are rising
Manila Top Real Estate Market
ASEAN Integration
Page 152
Beyond the Basics
Names
Initial Contact and
Introductions
Business Cards
Negotiations and Decisions
Demeanor
Social Etiquette
Pages 156-159
8. Country Profiles
A Look at Australia
Geography
 22.5 million, 6 states
Economy
 Continuous growth;
strong stable system
Beyond the Basics
 Diverse and
multicultural society
 Informal in business
and social life
Foreign Ownership
 Some restrictions for
second-hand housing
 Agents licensed by
state/territory
Pages 163-167
A Look at Hong Kong
Geography
 7.1 million, Basic Law
Economy
 Expensive real
estate, stamp duty
Beyond the Basics
 Behavior and
protocol similar to
China, but more
relaxed
Foreign Ownership
 Can buy, rent, invest
 Foreign exchange
restrictions for
mainland Chinese
 Licensed agents
Pages 169-173
A Look at Indonesia
Geography
 253.6 million, Diverse
Economy
 Many obstacles
 Foreign Ownership
 Cannot own land,
businesses, or houses
but can purchase
strata title
 No license required
for agents
Beyond the Basics
 Respect and
relationships
important
 Strive for harmony
and saving face
Pages 175-181
A Look at South Korea
Geography
 Seoul is 10.4 million
Economy
 12th largest
 Chaebols
 Foreign Ownership
 Few restrictions
 Agents must be
licensed
 Expensive to rent
Beyond the Basics
 Strict hierarchy,
respect for seniority
and elders, and
group harmony
Pages 183-188
A Look at Malaysia
Geography
 30.1 million
Economy
 Exporter of oil and gas
 Government subsidies
 Foreign Ownership
 Few restrictions, but
minimum value req.
 MM2H
 Agents must be
licensed
Beyond the Basics
 Bumiputra
 Modest, selfdeprecating, and
face-saving behavior
admired
Pages 189-198
A Look at New Zealand
Geography
 4 million, kiwis
Economy
 Agricultural exports
 Globally competitive
 Homes sold in auction
format, no MLS
 Foreign Ownership
 Few restrictions
 Licensed agents
(national)
Beyond the Basics
 Egalitarian
 Concise,
straightforward
approach to business
Pages 199-203
A Look at Singapore
Geography
 5.6 million, mix of
Chinese, Malay, Indian
Economy
 #1 ease of doing
business
 Foreign Ownership
 Approval required in
some cases
 Stamp duties
 License required
Beyond the Basics
 Indirect
communication and
saving face valued,
yet keen negotiators
Pages 205-209
A Look at Taiwan
Geography
 Taipei is 2.7 million
Economy
 Healthy trade surplus
and foreign reserves
 Foreign Ownership
 May purchase or lease
if Taiwanese are
allowed to in
foreigner’s country
 License required
Beyond the Basics
 Traditional Chinese
culture
 Family important
 Group harmony
Pages 211-214
A Look at Thailand
Geography
 Bangkok is 8.2 million
Economy
 Tested by recession,
flooding, and political
unrest, but resilient
 Foreign Ownership
 Cannot own land, only
condos and apts
 Practitioners, business
not regulated
Beyond the Basics
 95% Buddhist, sets
tone for hierarchical
relationships
 Wai (greeting)
 Body language key
Pages 215-219
A Look at Vietnam
Geography
 93.4 million
Economy
 State-owned
enterprises dominate
 Foreign Ownership
 2015 law allows
foreigners to buy
houses with valid visa
 Licensed property
trading floors/agents
Beyond the Basics
 Value duty, loyalty,
honor, respect for
age and authority,
and family devotion
Pages 211-225
Summary: What Did We Learn?
 Identify the social, political, and geographical
characteristics of Asia/Pacific countries.
 Develop market intelligence by researching factors
that shape Asia/Pacific real estate markets and
assessing business opportunities.
 Adapt business and social behavior to conform to
customs and cultural norms.
 Develop strategies for making productive network
contacts and marketing your real estate services to
clients and customers from Asia/Pacific countries.
Page 225