ASIA MARKET SNAPSHOT | Q1 2018, by Colliers International
While the first quarter of 2018 proved unsettled, with concerns about a global trade war and heightened volatility pressuring global markets, Asia’s property sector remains buoyant overall, supported by the region’s robust growth and forward-looking government policies. Massive infrastructure investments in countries such as Japan, China and Indonesia will continue to create opportunities for investors, while in major markets like Hong Kong and Singapore are likely to benefit from the perception of property as a relatively safe haven in uncertain times.
Industrial, logistics sector in focus
In Vietnam, where the industrial sector expanded at a rate of nearly 10% in the first quarter, investors are actively searching for warehousing and logistics opportunities. Similarly in Myanmar, where manufacturing FDI remains close to all-time highs, the sector is poised for strong growth as more companies look to set up shop in the country. The high future growth and development potential of these and other Asian markets mean this is likely to remain a major investment theme for the long term.
Volatility may work in some markets’ favour
As political and economic uncertainty dims the outlook for other assets, prime Asian property markets like Hong Kong and Singapore could see more capital inflows. Both the mass and luxury residential markets in Hong Kong continue to hold up well, with a house at Mount Nicholson recently sold for the equivalent of over USD19,000 per square foot. Singapore has seen a surge in residential collective sale activity, with over USD4 billion transacted in the first quarter of 2018 alone approaching three-quarters of the total last year.
Positive prospects for Shanghai
Shanghai remained China’s most active property investment market in the first quarter, with deals totaling over USD2 billion. While recent steps to tighten control over lending to the real estate industry may squeeze some segments of the market, projects with stable income streams will continue to attract investor interest, particularly those aligned with the government’s efforts to upgrade the city’s industrial base.