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Top property investment cities 2017

February 23, 2019

2017 Trends in Real Estate Investments, Asia Pacific

Emerging cities are now the preferred destinations for property investors, according to PWC’s latest survey (2017). Traditional investor favorites – Japanese and Australian gateway cities — seen as a vote for “flight to safety approach,” are now relegated to lower priority as opposed to the “quest for yield.”

Top Investment Cities

1st Bangalore & 2nd Mumbai. In its latest survey, Indian cities Bangalore and Mumbai are key for investors as the cities continue to thrive as India’s main hubs for the business process outsourcing (BPO) and IT industries, spurring demand for properties across all sectors including industrial, commercial and residential.

3rd Manila. While some critics are concerned about the new administration in Manila, most investors are convinced that the hugely popular President Duterte will be able to push through much-needed reforms in the country. A vibrant economy led by a booming BPO market and strong remittances from overseas workers continue to boost demand for properties and rents continue to show good growth.

4th Ho Chi Minh City. After several years in the economic doldrums, Vietnam is today one of the fastest-growing economies in Southeast Asia. According to one investor, it is now “on the radar screen of nearly all the major investors in the region,” and is arguably the most popular real estate invest­ment destination in Southeast Asia.

5th Shenzhen, 6th Shanghai & 10th Guangzhou. Prices for key gateway cities in China soared in 2016. Government crack­down on peer-to-peer lending and outward fund withdrawals seem to dent little the rising property rises in these cities. This remains to be seen in view of the latest (Oct’2016) limits on currency transfers out of China.

7th Jakarta. While Jakarta has proved to be a popular choice in the PWC survey for the last five years, oversupply conditions in the office sector is forcing investors to look elsewhere, in particular affordable housing projects. According to one fund manager: “In terms of middle classes buying high-rise apartments, the market is very weak, so the strong fundamentals are now at the bottom of the housing market.”

8th Bangkok. With new supply and absorption projec­tions looking healthy, rents and capital values continue to rise steadily over the past few years. Political instability has been an issue for investors in Thailand for several years, and there seems currently little prospect of change in that regard, although to be fair the appearance of ongoing crisis seems to have little impact on day-to-day life or the business/investor community.

9th Sydney. Sydney fell from second in last year’s rankings to ninth in 2017. The housing market is an ongoing cause for concern. Nationwide, real home prices have increased by 45% since 2012, fueled by several base rate cuts and by increasing numbers of foreign (esp Chinese) buyers. Sydney is currently the highest-ranked Asian component of the UBS Global Real Estate Bubble Index

Source: Emerging Trends in Real Estate, Asia Pacific 2017, PWC

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