The State of Asia-Pacific Real Estate Investment
Investment in real estate worldwide is forecasted to be 10% to 15% lower in 2018 than this year, according to The Urban Developer, but it will be stable. This is because it will be impossible for the healthy growth of the past several years to be maintained. The trend will be toward debt refinancing, recapitalisation and multi-channel entity level deals instead of single-asset acquisitions.
In Asia-Pacific, third-quarter transaction volume was 5% higher than 2016 and 12% higher for the first nine months of the year.
Let’s look at the trends in Asia-Pacific real estate:
- An influx of Western capital needed: Asia trails the European Union in its level of economic inclusiveness, according to the Asia-Pacific Regional Cooperation and Integration Index. The index measures infrastructure and connectivity, movements of people, money and finance, trade and investment, regional chain value, and institutional and social integration. Direct foreign investment into the region was largely from other Asian nations. China and Japan invested $224 billion followed by Hong Kong at $394 billion, Singapore at $165 billion and Korea at $73 billion. Source: Asia Times
- PropTech the dominate investment: PropTech, or property technology, investment in Asia-Pacific is outpacing investments in the U.S. and Europe, according to a report by real estate consultant JLL. Approximately 41% of global PropTech investment occurs in China, including Hong Kong. By 2020, investment in Asia-Pacific is forecasted to reach $4.5 billion annually. “With its young population, rapid urbanisation and ‘mobile first’ mindset, all the conditions are in place for this new sector to accelerate, bringing increased efficiencies and better experiences for the end-user,” Anthony Couse, CEO of JLL Asia-Pacific, said. Source: The Property Gazette
- Singapore seeing a turn around: For the first time in four years, housing prices in Singapore are improving. During the third quarter, new home sales increased 29.1% and property value increased 0.7%, according to the Urban Redevelopment Authority. JLL Singapore forecasts new home prices will jump 10% to 20% over the next 24 to 36 months. Primary-market home sales will be $16 billion for the year, JLL says. Source: Property Wire
- Largest investments in India: In 2017, investment volume in Asia-Pacific is forecasted to reach $611 billion, according to global property consultant Cushman & Wakefield, up from $4.8 billion last year. India is a hot emerging market. Between June 2016 and June 2017, investment in India’s six largest property markets increased 100%. Investments totaled $2.87 billion with 75% coming from foreign investors. Mumbai received the most investment, $1.75 billion, ranking it 81st in the world for successfully attracting capital. Sources: The Economic Times and ET Realty
- Strategic importance: During his recent trip to Asia, U.S. President Donald Trump said the Philippines is “is a strategic location—the most strategic location. And, if you look at it, it’s called the most prime piece of real estate from a military standpoint.” The Philippines is a former American colony, but current Philippine President Rodrigo Duterte has vowed to expel foreign troops from his country. Source: Yahoo News
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