The Wealth Report 2022 –Asia Pacific’s Outlook, Q&As with Christine Li

Knight Frank's Wealth Report is the ultimate guide to prime property markets, global wealth distribution, the threats and opportunities for wealth, commercial property investment opportunities, philanthropy and luxury spending trends.

Which Asian markets should residential investors consider in 2022 if they are seeking strong returns?

With wealth preservation remaining a priority during times of heightened economic uncertainty, residential investors should no doubt look to some of the region’s core markets for investment. Pent-up demand will also support price growth for properties in key safe-haven markets. While some governments are already on a tightening cycle, we can expect conditions in Australia to remain accommodative, given a more benign inflation outlook. Investors should also consider Singapore, with its well-regulated fundamentals as well as an absence of a capital gains tax. While cooling measures on the island have muted price growth potential, it remains attractive to long-term investors due to its strong wealth preservation qualities.           

Do you expect Asian markets to be less global post pandemic?

Integration into the global economy remains vital for countries to secure growth opportunities and stay relevant in an era of technological change. I do not think it is an option. While the pandemic has elicited varying degrees of restrictions in the region, for now, we expect this to eventually be lifted. Once the pandemic wanes, the state of globalisation in the region will only continue to increase.

What impact will the slowdown in Chinese mainland’s economy have on the wider Asia Pacific region in terms of real estate?

Chinese mainland’s economy’s incredibly massive economic influence extends worldwide and not just on the region and a slowdown would definitely be felt mainly through GDP channels. This is unlikely to filter completely through to the real estate sector that will, to the extent, derail the long-term structural fundamentals that the region enjoys. Still, policies to control leverage in the country’s real estate developers can affect existing Chinese investments in the region and introduce volatility in financial markets. However, we see the slowdown to be largely policy-induced which can be calibrated and there are already signs that the authorities have softened their stance recently. Regulators remain cognizant of the importance of the sector to its economy and previous episodes have not resulted in a hard landing for the economy. I expect the impact, if any, to remain manageable.