Which Residential Properties is the Most Attractive? Singapore, Malaysia, the US or UK?

Much has been talked about Malaysian properties. I analysed the properties of various states and not surprisingly, KL emerged as the top performer (see chart 1 of attachment). More interestingly, it is totally uncorrelated to the world's stock markets because in the recession of 2000 - 2003, they continued to rise, unlike Singapore's. However, in 2008, KL and the other states exhibited "some" drop in property prices, though not as steep as in Singapore. KL properties fell less than 5% compared to Singapore's 20% drop from 2Q2008 - 2Q2009 (see table 1)

Table 1: House Prices of Malaysia by States from 2000 - 2011 3Q

If I compare KL properties vs Singapore's, the former did only 5.1% per annum vs 7.5% for Singapore (both excluding rental income. If I factor in rental, I believe the gap narrows but I wonder if KL's rental is real because of difficulty in finding quality tenants, long vacant periods, disputes with tenants not easily resolved legally. London property prices exhibited the greatest increase (see table 3). From 1995 - 2012, it increased 13.5%, vs the US which increased only 8%. However, London's property prices have increased quite steeply since March 2009, same as in Singapore, whereas in the US it is still falling after 6 years! This indicates that US properties are in the best part of the cycle. Little doubt that Warren Buffett, Marc Faber have started to recommend US properties (see Table 2)

Table 2: US Home Prices By State

Table 3: London House Price Index

However, what's even more interesting was the property prices of Johor. There was obviously a glut or lack of demand between 2000 - 2006, falling 15% before climbing up in the last 6 years. The uptrend seems to accelerate and one wonders if Johor's price rise is single handedly hauled up by the Iskander properties. Nevertheless, the rise in 2011, at its best, still pales in comparison to Singapore's. In one quarter in Johor, annualised increase was 8.4% (that's one quarter multiply by 4 to project for one year).

In terms of the type of housing, there's virtually little or no difference between buying a terrace, bungalow, or semi-detached in Malaysia. However, high rise condominiums seems to have risen at a slightly slower rate. This could indicate that buyers prefer landed properties in Malaysia (see table 4)

Table 4: Malaysia's House Price Indices by Type 2000 - 2011 3Q

Comparing Malaysia, UK, Singapore and the US, the US properties seems to be in the right part of the cycle. In some states like New York, prices have fallen by only 30% but hasn't risen. However, in cities like Las Vegas, prices have fallen some 70% and haven't even reached the bottom. For proximity, Johor properties seem to still be in an attractive level, having risen less than 20% from its bottom in 2002, that's less than 2% increase per year. However, one must factor in execution risk of the government, lack of rental income etc.

Another market that is interesting and that is nearer to Singapore than the US is Hong Kong. However, I believe the prices have risen so much now that it's not worth looking at at the moment.