Asia-Pacific Residential Review: Mid-Year Analysis
With interest rates and inflation still high, the first half of 2023 has brought a unique set of challenges and opportunities for investors.
2 minutes to read
The Asia-Pacific residential market has always been a dynamic and ever-changing landscape.
Singapore emerged as the top-performing market, recording an 8.0% YoY growth. The Asia-Pacific Residential Review H1 2023 report takes a deep dive into the performance of mainstream residential markets across Asia-Pacific, giving you a better understanding of the current trends and offering valuable insights for the future.
Asia-Pacific residential markets
Despite the bull run of home values in the past years, residential prices have shown signs of plateauing in the first half of 2023, indicating a market correction in multiple territories.
However, with interest rate hikes currently on pause, buyers are seizing this window of opportunity to invest in their dream homes. This trend has been particularly noticeable in Australia, New Zealand, and India.
The high inflationary conditions persist, yet a combination of limited housing supply, restrained new constructions, and robust household formation are supporting prices in various markets. Out of the 25 cities monitored, 14 have recorded positive annual price growth in H1 2023.
- Southeast-Asia: Singapore emerged as the top-performing market, recording an 8.0% YoY growth. Despite narrowly avoiding a technical recession in Q2 2023, home prices in the city-state rose 3.1% in H1 2023. Meanwhile, the Malaysian economy advanced by 5.6% YoY, with Kuala Lumpur and Penang seeing their prices grow by 0.34% and 5.78% YoY respectively.
- Australia and New Zealand: Despite facing a technical recession, New Zealand's housing market exhibited signs of momentum. Prices in Auckland and Wellington dipped 10.6% and 10.5% annually, indicating a slowing rate of price deceleration. In Australia, despite a higher mortgage rate, the average sales volume remained stable, suggesting a restoration of confidence in the property market.
- Greater China: Buyers remained cautious due to bearish stock market performance, high-interest rates, and sluggish economic recovery. Annual change in transaction volume for Mainland Chinese cities remained negative, reflecting the lackluster effect of the 16-point rescue package implemented in late 2022. However, Hong Kong adjusted the maximum loan-to-value ratio, easing down-payment requirements, a move that may stimulate the market.
- India: In Q1 2023, the Reserve Bank of India raised the interest rates by 25 bps. However, they have suggested that the rate hike cycle may come to an end soon. In H2 2021, the prices of residential properties have increased, with Mumbai leading the growth at 6.0% in H1 2023. As inflationary pressures ease, the outlook for the market remains positive for the rest of the year.
In this ever-evolving landscape, the Asia-Pacific residential market continues to show resilience. The second half of 2023 will no doubt bring its own challenges and opportunities. However, with careful monitoring and strategic investment, there is potential for strong returns across the region.