{"id":3875,"date":"2023-09-11T08:09:28","date_gmt":"2023-09-11T01:09:28","guid":{"rendered":"https:\/\/arcadiaconsult.com.vn\/?p=3875"},"modified":"2023-09-11T08:09:28","modified_gmt":"2023-09-11T01:09:28","slug":"the-guide-to-buying-your-vacation-home","status":"publish","type":"post","link":"https:\/\/arcadiaconsult.com.vn\/en\/the-guide-to-buying-your-vacation-home\/","title":{"rendered":"THE TATLER GUIDE TO BUYING YOUR FIRST VACATION HOME"},"content":{"rendered":"

Purchases of vacation homes are seeing a new high\u2014experts share the lowdown on what you need to know, before embarking on such an investment<\/strong><\/span><\/p>\n

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<\/span> COVER A home in Dubai, marketed by Engel & V\u00f6lkers. Image: Engel & V\u00f6lkers<\/span><\/figcaption><\/figure>\n

In 1623, Louis XIII, the King of France took a fancy to a small commune in the western suburbs of Paris called Versailles and built a hunting lodge there. His successor, Louis XIV, turned it from the chateau it had subsequently become into the Palace of Versailles, now one of the country\u2019s most popular tourist attractions. The famed castle is also believed to be the earliest example of a holiday home. The idea of a recreational residence has seen many iterations since then, spurring not only the demand for vacation retreats but also the notion of an abode its owner could rent out to visitors and digital nomads. Furthermore, as borders open up, the thirst for \u201crevenge travel\u201d has come to the forefront. The jet-set are eagerly returning to their old ways, making up for the years spent being primarily home-bound; this has, in turn, sparked a demand for pieds-\u00e0-terre abroad they can now visit with ease.<\/span><\/p>\n

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<\/span> ABOVE Photography: Mark Stoop \/ Unsplash<\/span><\/figcaption><\/figure>\n

According to Sotheby\u2019s International Realty\u2019s 2023 Luxury Outlook report, the luxury second-home market saw a boom even during the pandemic years. Tammy Fahmi, senior vice-president of global servicing and strategy at Sotheby\u2019s International Realty reveals that the toss-up has since been between lifestyle versus financial considerations.<\/span><\/p>\n

Victoria Garrett, Asia-Pacific head of residential at Knight Frank agrees. \u201cPurchasing a second home used to be largely viewed as a financial investment. But that perception is evolving to amalgamate financial investment with your version of paradise,\u201d she explains. Bjorn Fjelddahl, partner at Odin Property attributes the frenzy for vacation homes to a new-found awareness of our surroundings; most of the Nordic boutique firm\u2019s developments are in Hokkaido, Japan. \u201dSome might call it an urgency: of the importance of nature, the environment, clean air and the yearning for quality time with loved ones,\u201d he adds.<\/span><\/p>\n

Natural Instinct<\/span><\/h2>\n
Following the decision to purchase a second home is often the conundrum of whether buyers should look for an abode in the city or opt for one that\u2019s ensconced in nature. It is ultimately a matter of personal choice, says Fahmi. \u201cFor some, being within walking distance of top restaurants and shopping makes choosing a city easy, while resorts are popular among retirees and those with families given the variety of amenities and activities they offer,\u201d she says. Regardless of the objective behind the purchase, \u201canyone considering this must accurately evaluate their own financial situation, risk tolerance and investment goals\u201d, says Dominic Volek, group head of private clients at Henley & Partners.<\/span><\/div>\n
Volek recommends reviewing the property\u2019s history for any past issues or disputes that could affect its value. \u201cHire a reputable real estate agent who is knowledgeable and experienced in the local market. Research the area thoroughly and consider factors such as the local economy, climate, crime rate, proximity to attractions and amenities.\u201d Fahmi considers this the first port of call as well, considering how such purchases are often made in a destination one might not be entirely familiar with. \u201cIt\u2019s also important to seek out or get recommendations from your real estate advisor on local accountants and lawyers who can help you to navigate any tax implications and plans for your property,\u201d she adds.<\/span><\/div>\n
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<\/span> ABOVE Marketed by Sotheby\u2019s International Realty, The Coast at Singapore\u2019s Sentosa Cove is a 249-unit sea-facing condominium with scenic views of the southern waters. Image: Sotheby\u2019s International Realty<\/span><\/figcaption><\/figure>\n

Location Matters<\/span><\/h2>\n
Follow the trends, speak to industry insiders, and consult friends and family who have gone down the same path. But the key prerequisite for a principal property still applies: location matters. Clarice Lau, head of sales for residential international project marketing at Knight Frank Singapore says that Singapore\u2019s safe-haven status continues to make it a popular choice among ultra-high-net-worth individuals (UHNWI) in Asia. \u201cIt is their top choice in the Asia-Pacific (APAC) region, and the fourth choice globally when looking for their next home purchase.\u201d<\/span><\/div>\n
However, Lewis Cha, executive director of List Sotheby\u2019s International Realty Singapore paints a different picture based on the Global Property Guide (GPG) ratings, which lists Malaysia as the best country in Asia to invest in, followed by Indonesia, the Philippines and Vietnam. This could be attributed to the fact that there are very few restrictions on foreigners owning a freehold property in Malaysia, adds Chris Liem, owner and principal of Engel & V\u00f6lkers in Hong Kong. Volek concurs on the significance of the Vietnam market. \u201cIn Vietnam, the vacation-home market is still relatively new but growing quickly, with Da Nang, Nha Trang and Phu Quoc featuring prominently on the radar of second-home buyers.\u201d<\/span><\/div>\n
In comparison, foreign tax can go up as high as 60 per cent for non-resident property buyers in Singapore. In the city-state, a price-curbing measure known as the Additional Buyer\u2019s Stamp Duty (ABSD) was implemented in December 2021 to discourage multiple purchases of property, especially by foreigners. In April 2023, the ABSD rate notably doubled from 30 per cent to 60 per cent for overseas buyers, who now have to pay taxes amounting to that percentage of the property\u2019s value. Even with this eye-watering tax increase, some experts think that Singapore will remain appealing to UHNWIs. \u201cSingapore is still a top choice given its pro-business environment, political stability, excellent healthcare and educational standards; some [buyers] will still be willing to pay higher taxes since the pros still outweigh the cons,\u201d says Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie.<\/span><\/div>\n
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<\/span> ABOVE A home in Mid-Levels, Hong Kong, marketed by Engel & V\u00f6lkers. Image: Engel & V\u00f6lkers<\/span><\/figcaption><\/figure>\n<\/div>\n
Sun adds that recent condominium purchases within the $5 million price bracket remain unaffected by the new ABSD rates; these buyers are likely foreigners who have moved here with the objective of gaining citizenship and already have the necessary wealth and processes in place to achieve this goal. The majority of such buyers were from China, followed by those from India and Indonesia.<\/span><\/div>\n
While Singapore\u2019s property market has displayed resilience, Liem is of the opinion that Hong Kong should not be overlooked as an investment destination either. \u201cWith Hong Kong fast-forwarding its efforts to regain its status as a regional financial hub, it is attracting more UHNWI investors,\u201d he adds. Engel & V\u00f6lkers has been successfully marketing a few retreats on Lamma Island and other locations in Hong Kong.<\/span><\/div>\n
According to Garrett, other areas in the APAC region that are popular for both vacation homes and properties with investment potential are waterfront abodes and branded residences in Australia as well as units close to Japanese ski resorts in Niseko, Hokkaido. She adds that in Thailand, the demand is for resort homes in Phuket and branded residences in Bangkok. The weakening Japanese yen is definitely a selling point, and the fact that Niseko has been increasingly positioning itself as an all-season destination has attracted many Singaporean investors.<\/span><\/div>\n
Garrett predicts that with the shift to hybrid working and a rekindled love of the great outdoors, the demand for Japanese destinations that was evident during the 2021-2022 ski seasons will continue. \u201cWith Japan hosting the Ski Jumping World Cup 2023 [held in Sapporo recently in January], its popularity is bound to increase both locally and [among] overseas [buyers], particularly from Singapore, Hong Kong, China, Southeast Asia and Australia.\u201d<\/span><\/div>\n
Moving slightly further away from the region to western Asia, Mohab Samak, managing director at Engel & V\u00f6lkers Market Centre in Dubai also recommends investing in a holiday house or apartment in Dubai due to its attractive climate, infrastructure and high quality of life. \u201cThe GCC (Gulf Cooperation Council) states, particularly Dubai, Qatar and recently, Saudi Arabia, are anticipated to have the highest investment potential in Asia,\u201d he says.<\/span><\/div>\n
Eventually, where you want to holiday with your family hinges on your personal feelings about a certain place, its vibe and, hopefully, the friendships you can develop, says Isabelle Miaja, founder of Miaja Design Group, an interior design company that has designed a plethora of luxury hotels, resorts and residences around the world. From these past experiences, Miaja suggests staying a few times in the area on vacation to get a feel of it before buying.<\/span><\/div>\n

The Long Run<\/span><\/h2>\n
Having rental income might be another important consideration in the purchase of a vacation home, says Fjelddahl, \u201cbecause if managed well, your running costs and more can be offset by rental income\u201d. Cha concurs, urging further consideration of locations when straddling personal use and investment potential. \u201cBeaches and mountains might lose their popularity when overtaken by other locations, or experience seasonal highs and lows. As tourists come and go, it is good to invest in a location with healthy demand from local tenants and expatriate professionals,\u201d he adds.<\/span><\/div>\n
The GPG lists Indonesia as the most attractive prospect with a rental yield of 5.75 per cent, followed by the Philippines with 5.45 per cent. Malaysia, India and Japan fall between 4.4 and 4.8 per cent, whereas Hong Kong and Taiwan show the lowest yield of 2.8 and 2.1 per cent respectively. Attractive as these figures are, it is important to also take note of the rental income tax that might accompany a property. In this scale, India imposes the lowest at 5.8 per cent, compared to the 20 to 30 per cent tax one would pay in most countries, says Cha, adding that Malaysia occupies the top end of that scale.<\/span><\/div>\n

New Value<\/span><\/h2>\n
As Cha explains, investors usually buy property for two reasons: rental yields and capital appreciation. \u201cThese are the key factors of consideration as to whether they should hold [onto] or sell the property,\u201d he says. Another key defining factor that adds to the resale value is the history, reputation and quality of the developer, adds Fjelddahl. For this reason, as part of the due diligence to exercise before buying, \u201cthe investor needs to check whether there are any barriers to foreign ownership, the taxes involved and, specifically, the ease of moving their funds out if they have to sell their property,\u201d he says. Investors in Hong Kong and Singapore do not pay capital gains tax upon disposal of property, whereas Taiwan has the highest capital gains tax at 35 per cent, followed by India at 30 per cent and Indonesia at 20 per cent, says Cha.<\/span><\/div>\n
As for price appreciation, Taiwan, Singapore and Japan saw home prices rise by more than 35 per cent in the past five years despite the pandemic. \u201cAside from the decline in home prices in Hong Kong and the Philippines, prices remained constant in India and Vietnam, while Malaysia and Indonesia saw a moderate price appreciation over the same period,\u201d explains Cha.<\/span><\/div>\n
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<\/span> ABOVE Champalimaud Design realised an elegant interior transformation for one of eight exclusive villas in the 77\/79 Peak Road luxury development in Hong Kong. Image: Champalimaud Design<\/span><\/figcaption><\/figure>\n
However, when it comes to estimating the renovation cost of your second home, owners should still treat it like they would when purchasing a primary residence, says Winston Kong, partner at international design firm Champalimaud Design; the practice has crafted luxurious hotels and residences in Asia and beyond. Kong advises conducting a thorough inspection to suss out any structural, mechanical, electrical, plumbing or construction issues. He also recommends addressing design-related matters specifically in the kitchen and bathrooms; these include assessing the condition of the fixtures and appliances as well as ensuring their proper placement for optimal functionality. \u201cIt\u2019s prudent to steer clear of properties that necessitate significant plumbing, mechanical, HVAC (heating, ventilation and air-conditioning) or structural repairs.\\The extent of such repairs should be considered in relation to the potential value of the property versus the purchase price,\u201d he says. If any renovations are needed, it is important to ascertain where the construction crew is going to come from\u2014whether it is from the local village or the nearest city, says Miaja. \u201cOne knows how difficult it is to renovate in your own backyard, even more so in a foreign country. Check the local newspapers and browse the Internet before talking to a real estate agent to ensure you pay the right price and value for a home in that area.\u201d In the case of a new build, she suggests working with a reputable local architect to ensure easier logistics management.<\/span><\/div>\n

Tatler Asia<\/span><\/h2>\n
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<\/span> ABOVE In this Hong Kong villa, Champalimaud Design crafted a sophisticated modern interior with subtle nods to its Asian context. Image: Champalimaud Design<\/span><\/figcaption><\/figure>\n

Safe and Sound<\/span><\/h2>\n
Another important factor in the purchase of a vacation home is minimal upkeep. \u201cIt\u2019s essential to consider the weather patterns of the city or town, such as hurricanes or heavy snowfall, and how they will affect the property\u2019s maintenance,\u201d adds Kong. Maintenance fees such as lawn care, pool upkeep and snow removal should be researched, along with the availability of housekeeping and caretaker services. The latter, Kong says, would prove especially vital if the plan is to allow family and friends to use the property.<\/span><\/div>\n
Another aspect that is key is security. Being in a foreign country, one cannot rely on the same standards of comfort and security as at home. \u201cIt is important to ensure you are protected against theft and fire, and ensure that the security cameras are updated and working,\u201d says Miaja.<\/span><\/div>\n

Tatler Asia<\/span><\/h2>\n
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<\/span> Make it yours <\/span><\/figcaption><\/figure>\n<\/div>\n<\/div>\n

Last but not the least, refitting the home to suit your purpose is important. \u201dAsk yourself what the main intention of the vacation home is,\u201d says Derek Lim, Asia general manager at luxury furnishings retailer Space Furniture. In that respect, a vacation home can be used to host family and friends under one roof. \u201cFor a holiday home used for hosting, it would be essential to curate an experiential living space that suits the purpose. An example would be selecting a modular sofa that offers endless configurations, good lighting that can help to establish a cosy ambience, and a well-designed kitchen in which you can whip up the finest treats with ease,\u201d he says. When it comes to buying furniture, Lim recommends making purchases from authorised dealers, especially in the case of products that may require installation or after-sales support.<\/span><\/p>\n

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<\/span> ABOVE The Alea kitchen system from Poliform, an Italian brand available at Space Furniture that\u2019s favoured by architects and homeowners for its sleek designs and broad customisation options. Image: Poliform<\/span><\/figcaption><\/figure>\n

While ready stock would save on waiting times, he declares that custom pieces would effortlessly elevate any home\u2019s decor. \u201cHowever, homeowners should be prepared for an indent period of a minimum of 18 to 20 weeks for such pieces,\u201d he warns. \u201cA mix of both [ready stock and custom pieces] would perhaps allow for more flexibility, although it may not necessarily translate to cost savings.\u201d While a holiday home is undoubtedly enviable to own, there are still many factors to consider if one wants to avoid future complications along the way. \u201cDos and don\u2019ts are easy to put on paper, but also easily forgotten as a vacation home is often an affair of the heart,\u201d concludes Miaja. \u201cSo follow your heart, but make sure your head stays close by.\u201d<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Purchases of vacation homes are seeing a new high\u2014experts share the lowdown on what you need to know, before embarking on such an investment In 1623, Louis XIII, the King of France took a fancy to a small commune in the western suburbs of Paris called Versailles and built a hunting lodge there. His successor,…<\/p>\n","protected":false},"author":5,"featured_media":3892,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[93],"tags":[],"class_list":["post-3875","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/arcadiaconsult.com.vn\/en\/wp-json\/wp\/v2\/posts\/3875","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/arcadiaconsult.com.vn\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/arcadiaconsult.com.vn\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/arcadiaconsult.com.vn\/en\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/arcadiaconsult.com.vn\/en\/wp-json\/wp\/v2\/comments?post=3875"}],"version-history":[{"count":0,"href":"https:\/\/arcadiaconsult.com.vn\/en\/wp-json\/wp\/v2\/posts\/3875\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/arcadiaconsult.com.vn\/en\/wp-json\/wp\/v2\/media\/3892"}],"wp:attachment":[{"href":"https:\/\/arcadiaconsult.com.vn\/en\/wp-json\/wp\/v2\/media?parent=3875"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/arcadiaconsult.com.vn\/en\/wp-json\/wp\/v2\/categories?post=3875"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/arcadiaconsult.com.vn\/en\/wp-json\/wp\/v2\/tags?post=3875"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}