China’s swift turnaround augurs well for the rest of the region as we enter the recovery phase of the pandemic. Expectations of a prolonged supportive policy environment in 2021 combined with successful vaccination programs and more open borders are already boosting transactions volumes ahead of much anticipated broad-based positive growth. Countries with a strong domestic investor base continue to outperform.
Simon Smith, Savills Research
China
With the economy back up and running the government is starting to take aim at structural issues, reducing financial risks and limiting financing to the real estate sector. All eyes are focused on the 14th Five Year Plan and its potential impact on the property market with many expecting a focus on sustainability and mitigating external risks through greater self-reliance and growth in domestic consumption.
Hong Kong
Despite a fourth wave in the final quarter of 2020, investment activity is showing signs of life as en-bloc and site sales rise. Negative real interest rates, plenty of active capital and more pragmatic sellers have combined to boost deal making across a broad range of asset classes.
India
Having gone into recession earlier this year, the government’s November stimulus package laid a foundation for growth in 2021, which is estimated at over 8%. While the union government continued to counter the economic slide with fiscal and policy incentives, some state governments stepped in as well, by scaling-back stamp duties on real estate purchases. The latter is clearly a factor in improved sales during Q4.
Indonesia
Indonesia’s economy is expected to see a V-shaped recovery with 2021 GDP forecast at around 6% to 7%. With many assets competitively priced, the property market in Jakarta should attract the interest of overseas investors in 2021.
Japan
Japan property continues to appeal to international capital amid the global uncertainty as attractive financing and a relatively stable economy drive an increasing proportion of transactions involving overseas investors.
Malaysia
Recovery is expected to be led by the industrial/logistics sectors, which have been very popular over the last 24 months.
Singapore
Slowly but surely, the investment sales market in Singapore is coming back to life.
Korea
While COVID-19 depressed transaction volumes in 1H/2020, transaction activity accelerated in 2H/2020 on the back of ample new supply and a stronger-than-expected economic recovery.
Taiwan
The pandemic seems to have had little impact on the land and commercial property markets. The central bank expressed concern about the speculative atmosphere in the property market and introduced tighter credit controls for real estate financing at the end of 2020.
Thailand
Whilst maintaining a positive outlook, market concerns are rising alongside higher local transmission rates.
Vietnam
The domestic economy is growing strongly, encouraging local investment. Foreign interest is similarly rising as a slew of strategic planning, legal and governance reforms have been introduced. The year ahead will be competitive for capital positions.