Asia-Pacific Residential Commentary
The economies across the Asia-Pacific were expectedly battered last year by the pandemic with almost all entering into recession, with many reporting GDP declines not seen on record and record highs in unemployment rate. However, despite this, a majority of the residential markets across the region still reported positive price growth, with 14 out of the 24 markets we monitor recording price growth.
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One example of this is Singapore which despite its economy contracting 5.8% year-on-year in 2020, a decline not seen since its independence, and unemployment rate rising to 3.5%, the highest not seen since 2003’s SARs, housing prices still rose 2.2% year-on-year for the full year. Furthermore, in the closing months of the year, domestic buyer demand remained robust with many new projects such as The Linq @ Beauty World and The Landmark selling over 90% of their units over their initial launch weekends.
The experience in Singapore is not endemic with the healthy demand generally witnessed across the region driven by low borrowing costs and vaccine optimism driven economic recovery expectations. Additionally, investor demand for real estate has risen towards the year end given the low bond yields and fuller valuations following the stock market rally; research by Knight Frank’s Hong Kong team have found that the general stock market index (e.g.Hang Seng Index) was highly correlated at 0.79 with local property prices.
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