The recent surge in the local stock market in the past couple of weeks have left investors in awe. Regulatory changes have been one of the major factors triggering the recent rise in stocks in addition to the influx of overseas capital which are looking for better investment returns. In fact, over the past few years major economies in the world have rolled out accommodative monetary policy and quantitative easing measures which have the effect of opening the floodgate of capital rushing into emerging markets looking for higher returns in an environment where interest rates are at or near historical lows.
Against this backdrop, investors around the world are pursuing different tools of investment to boost their returns. Property investment is one of them. However, there are not many options for investors given the fact that prices of properties in the local market have already reached record high in the past two years. Investors who still hold a strong belief in the long-term value of properties have been driven out of the local property market and have begun looking for opportunities elsewhere. Local and global real estate investors alike are eying previously unloved destinations such as Japan and Mongolia as promising markets.
The Mongolian economy has experienced rapid growth in recent years with double-digit growth recorded in 2012 and 2013, in tandem with demographic changes and a rapid increase in the number of overseas investors. The region presents exciting investment opportunities with a variety of mining and infrastructure projects currently in the pipeline. Ulaanbaatar, the capital as well as the largest city of Mongolia, is one of the cities in the country that present the most promising growth. At first glance, the city is a representation of old and new where luxurious apartment buildings stand next to traditional ger encampments. This juxtaposition of the traditional and the modern is a result of the economic development that has caused the city to gradually undergo a facelift in the past few years. The bright prospects of the country have attracted foreign capital to invest in invest in Ulaanbaatar. Infrastructure is the sector that first saw foreign capital pouring in, and it has in turn fired up growth of other sectors. Another pioneering sector is mining. According to the forecast by the International Monetary Fund, Mongolia’s economy is expected to see an annual grow of 14% from now to 2016, thanks to China’s increased demand for coal which has resulted in a strong mining industry.
As the largest city in Mongolia, Ulaanbaatar has benefit from the economic growth in the country. Despite the lingering signs of poverty in the city, a majority of the population are moving out of poverty and having better living condition. Mongolians are also beginning to adapt to western thinking that drives a shift in the mindset of the population. It is believed that the shift to a more modern Mongolia will continue going forward and Ulaanbaatar is expected to become one of the fastest growing cities in the world in the near future.