Real estate performance across much of the Asia Pacific region has been steadily attractive on the back of a strong capital market and healthy recovering leasing market. Japan, China, Hong Kong and Singapore experienced strong office leasing demand in the first half of 2015, while Australia and Korea witnessed short-term challenges due to a weakened economy. Recovery is expected in 2016 for key most markets while it is likely to remain subdued in Singapore due to a surge of new supply.
The Asia Pacific macro economy experienced a lull in 2014 and the first half of 2015 with soft domestic demand witnessed in most of the region’s large economies. Drags from the housing sector in China, the slowdown in the commodity sector in Australia and the impact from the MERS outbreak in Korea in June are respectively contributing to this, while the stock market turmoil in China in July continued to cast a shadow over the subdued region’s subdued economy. The growth momentum is turning, however, with signs of stabilization on the housing market in China supported by successive rate cuts together with accommodative fiscal policy. Japan returned to its recovery path after a year of stagnation following the VAT hike in April 2014. Growth-supportive monetary and fiscal measures were introduced in China, Korea, Japan and Australia and should stimulate stronger growth in 2016 and onward.
Source : Deutsche Asset & Wealth Management