As we had anticipated at the start of the year, most property markets in the region performed quite well in 2014. The large, liquid core markets of Japan and Australia re-priced quite aggressively over the past 12 months to the delight of owners in these markets. However, buyers seeking to enter market were met with frustration as yields moved down and transaction prices moved higher as a result of more numerous bidders. The main appraisal-based total return indices for both these markets are now in high single-digit/low double-digit territory on an unlevered basis. As seen below, China's equity market surged at the end of 2014 amidst significant volatility in the residential markets. Residential volatility is to be expected in an emerging market where unsold residential inventory peaked around six months ago.
We are forecasting an inflection point in many Chinese cities this quarter as positive price growth follows the strong volume of sales over the past five months. With many of the region's core markets fully or cAsia Pacific Watchlose to fully priced, investors may need to look harder and be more creative to find new opportunities in 2015.
Source : CBRE Global Investors