UK may be implementing capital gains tax in 2014 on foreign buyers of properties. It is not a good development because if implemented, London will fall well behind the US in terms of IRR for the next 5 years. I expect London to give me an IRR of 24% for next 5 years, with capital values rising until 2016 before correcting slightly as more supply comes on stream.
For US cities like New York, Houston and Austin, I expect an IRR of 23% for the next 5 years and uninterrupted upward movement in prices. US loses out to London because very few banks are able or willing to provide mortgages. The highest LTV I can get is around 65% and the taxes are much higher. The CGT of around 15% also puts it second best to London in the last 5 years. However, all these will change once London implements CGT.
Much of Malaysia is a write off. I would definitely not touch condos in Iskandar, no matter how cheap. I may consider a bungalow or semi-detached, if only the rental yield stacks up. I just cannot afford to keep a property that cannot generate cashflow.
With an IRR of 23%, if you are able to invest in a portfolio of stocks well, you could beat returns from properties (with leverage).
