Property Market Overview

Brunei's property market is opening up to foreign investment rapidly. The nation is coming from a legal situation in which its Land Code of 1909 declared that all land was owned by the Royal Family and the nobles. Today, only four to five per cent of lands are privately owned, and only around half of that ever makes it back onto the market with the rest being passed through families.

Up until recently, foreigners were barred from owning land freehold and leases were the only means through which they could purchase a plot - beyond cases where prior approval had been granted in writing by the King. However, the Sultanate has been making efforts to diversify its economy and reduce its reliance on oil and gas imports. As a result, securing overseas investment has been set as a high priority. Brunei's property market is set to play a key role here and the Land Department has recently released some of the country's state-land. Foreign investors will be allowed to own land with titles in an area declared as the country's 'economic zone' although there will be restrictions with regard to purpose. To kick things off, the country's Lands Department recently released 1,500 hectares to the Brunei Economic Development Board, BEDB, for general economic development purposes.

Of particular interest to overseas investors thus far have been released land parcels in the Kiulap and Gadong areas which are seen as having high potential for development. A proposal has been submitted to authorities for investment opportunities in these areas. The Brunei Economic Development Board (BEDB) has been tasked with handling what is believed to be a high number of queries coming in from foreign investors hoping to buy into Brunei. The growing interest is expected to lead to the Ministry of Development opening some more of Brunei's state-lands for projects that are viewed as viable by the Ministry.

Brunei's media and state agencies have been reporting that the country's property market has escaped the slump seen in other countries. Indeed, the view emerging from the sultanate seems to be that Brunei has proved immune from the entire global financial crisis. It should be kept in mind however, that the Sultan of Brunei runs the country as an absolute monarch and any criticism of his economic management is unlikely to be aired. Either way though, it is difficult to ascertain how deep any impact on the value of property in the country the downturn might be having, basically, because so little of it is actually on the market. This is a percentage that is rising rapidly however and some commentators believe there is too much coming online too soon, particularly in the commercial property market.

As well as releasing land on to the market the authorities are overhauling the country's legal infrastructure, especially in the area of the land code, and are introducing new regulations and rules to accommodate a business-conducive environment. The government is in the process of putting together what has been described as a 'master plan' for the country's development of which a property market driven by overseas investors will play a central role.

Developers will be licking their lips at the range of attractive business measures being introduced. The country's new Investment Incentives Act makes provision for encouraging the establishment and development of industrial and other economic enterprises, for economic expansion and incidental purposes. Investment incentive benefits vary from one program to other although key among them are exemption from income tax, exemption from taxes on imported duties on machinery, equipment, component parts, accessories or building structures and exemption from taxes on imported raw material not available or produced in Brunei Darussalam intended for the production of the pioneer products.

Essential information

Location
The Sultanate of Brunei, officially named Negara Brunei Darussalam is a small country on the island of Borneo. Other than its costal regions its two separate parts are surrounded on all sides by Malaysia. It faces onto the South China Sea.

Area
Total: 5,770 sq km
Land: 5,270 sq km
Water: 500 sq km

Population
381,371 (July 2008 est.)

Language
Malay is the official language of Brunei. There is also a significant Chinese speaking population. Many residents are proficient in either English or Arabic.

Religion
The population of Brunei is divided along religious lines as follows: Muslim 67 per cent, Buddhist 13 per cent, Christian 10 per cent, other (including indigenous beliefs) 10 per cent.

Currency/Money
The currency used is the Brunei dollar. It is denoted by BND.

Climate
Brunei enjoys a warm, equatorial climate with an average annual temperature of 27.1?C. There is little variation in the temperature year-round, although October to December generally sees more rainfall. average of 26.8?C (80.2?F).

International dialling code
+673. Those calling from East Malaysia can also dial 080.

Capital
Bandar Seri Begawan.

Electricity
240 Volts, alternating at 50 Hertz

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History

In 1783, the al-Khalifa family captured Bahrain from the Persians. In order to secure these holdings, it entered into a series of treaties with the UK during the 19th century that made Bahrain a British protectorate. The archipelago attained its independence in 1971. Bahrain's small size and central location among Persian Gulf countries require it to play a delicate balancing act in foreign affairs among its larger neighbors. Facing declining oil reserves, Bahrain has turned to petroleum processing and refining and has transformed itself into an international banking center.

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Government

The Sultanate of Brunei was founded when Sharif Ali of Hejadz married a local Brunei princess. He brought Islam to the region and was responsible for building numerous mosques. At present, Sultan Hassanal Bolkiah of Brunei, whose family has been on the throne since the fifteenth century, is the current head of state and head of government. Although the Sultan is advised by a range of councils and a cabinet of ministers he is effectively an absolute ruler. The media is extremely pro-government and the Royal family retains a venerated status within the country. There is no elected legislative body and ballots are not held. In September 2004, the Sultan convened an appointed Parliament which had not met since independence in 1984, although it lacks any capacity beyond that of advisor to the monarch.

Economy

Brunei's massively successful economy is based largely on crude oil and natural gas production, which together account for nearly half of its GDP. However, there are other factors which have helped make it so competitive, not least foreign and domestic entrepreneurship and government regulation. Substantial income from overseas investment supplements income from domestic production. Government coffers are such that it can provide for all medical services and subsidises rice and housing for its population. Stated plans for the future include upgrading the labour force, reducing unemployment, strengthening the banking and tourism sectors and diversifying the economy by reducing its reliance on oil and gas deposits. The national airline, Royal Brunei, has revealed plans to make Brunei a hub for international travel between Europe and Australia/New Zealand and major Asian destinations.

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Visas

Nationals of Israel are not allowed to enter Brunei, while nationals of Asean and many industrialised countries (though not all) do not require an entry visa. Among those who do not need a visa are citizens of the US (90 days), UK, German, Japanese, Canadian and New Zealand citizens (30 days). Those who need a visa must apply in advance at a Brunei embassy, where processing can take up to three days and costs B$15 for a single entry visa.

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Travel

Brunei International Airport (BWN) is the hub of national carrier Royal Brunei Airlines. The airport itself is small, especially given that it is the only international airport in the country, but it is clean and well organised. Royal Brunei Airlines (RBA) offers a reasonably comprehensive network. It operates daily flights to London, Dubai, Kuala Lumpur, Singapore, and Kota Kinabalu. Singapore Airlines flies five times a week from Singapore and Malaysia Airlines flies from Kuala Lumpur and Kota Kinabalu (twice a week from both cities). AirAsia also now operates flights from Kuala Lumpur and is by far the cheapest carrier to serve Brunei from an international Hub. Fares are now as low as US$35 one-way from Kuala Lumpur. AirAsia then flies from 35 destinations in Asia to Kuala Lumpur, where connections to Brunei are available.

Top tips for Brunei property
Guide to buying condos in Brunei
Guide to buying houses and land in Brunei

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