Top 10 Asia Pacific property trends for 2022

As the Omicron variant is fueling another spike of infections countries across the globe, we are still seeing some knee-jerk reactions to the new variant. The reality is that as long as infection numbers do not recede, governments will prefer to err on the side of caution and delay reopening plans. However, countries are now better equipped to cope with challenges from new variants, as vaccinations and the development of oral medication for COVID-19 continue to gather pace.

Over the next 12 months, we expect most governments to forge a transition to an endemic stage. This will set the tone for the region’s real estate markets to benefit from a reopening and recovery theme. While the pandemic’s trajectory could still evolve, a wide range of indicators is pointing to a stronger rebound in 2022, as Asia Pacific enters a new cycle of growth driven by low-interest rates, high inward investment, and pent-up demand in both the commercial and residential sectors.

See below the 10 biggest trends in Asia Pacific according to Knight Frank’s Research in property and hospitality this year.

1. The expanding tech sector will continue to be a key driver of office leasing activity.
2. Co-working will continue to gain momentum from enterprise client demand as corporates adopt longer-term hybrid work strategies.
3. The quest to integrate resilience into supply chains will set demand for modern logistics facilities in the region on another trajectory, elevating its importance as an operationally critical asset.
4. Pressure on available options is expected to drive rental increases in the logistics sector by an average of 2-3% across APAC.
5. The unorthodox access to international talent is likely to skew homebuying preferences across Asia-Pacific’s gateway markets in the long term.
6. Pent-up demand for residential properties in key safe-haven markets is expected to fuel price growth in the region by a further 3-5% in 2022.
7. Forward-looking demand and drive towards normalcy will fuel value growth across the region’s residential and commercial sectors.
8. Cross-border transaction volumes in the Asia Pacific is expected to see an uplift in 2022 with the majority targeting office assets.
9. The weight of capital looking for a home will keep property yields tight.
10. Unfortunately, 2022 will not be the year where international tourism will revive in a big way as plans to reopen borders to international travel will remain tentative and cautious. However, it will be a year of experimentation as more governments trial expanded travel arrangements via bilateral vaccinated travel lanes and targeted travel bubbles. This will set the tone for a stronger rebound in 2023. 

For more information, please read our 2022 Asia Pacific Outlook report.

This article was published in Asian Property Review.