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A S I A - P A C I F I C
he emergence of new markets
with potential for investment in
luxury residential developments
offers stimulating opportunities
for buyers in South East Asia –
but they need to be nimble
to keep ahead of
changing government policies designed
to prevent overheating. ‘The past 12 to
18 months has been a lot more
challenging for investors with a global
mindset,’ says Simon Smith, head of
Asia-Pacific Research at Savills. ‘It’s
about moving between markets to take
advantage of the most favourable
conditions for overseas buyers.’
As a first-tier global gateway city,
Hong Kong remains a comparatively
secure market, with stability expected
for the year ahead. The luxury sector
fared better than anticipated between
2015 and 2016, with apartment values
increasing two per cent.
Stability is also predicted in
Singapore, where a slowing economy
has affected property prices, although
real estate has been more buoyant than
other sectors. ‘It is believed that prices have now
bottomed out at the luxury end of the market,’
says Alan Cheong, head of Research in Singapore.
Luxury property here is divided into landed
houses and apartments, with ownership of landed
property mainly restricted to nationals. Around
26% of non-landed properties were bought by
overseas buyers in 2016, led by Chinese and
Malaysians. As in Hong Kong, property in
Singapore is seen as a safe haven in the region,
favoured by wealthy individuals seeking to
diversify their portfolios. International buyers
tend to look for well-maintained luxury
apartments in core central city locations,
including downtown areas and close to
the marina and harbourfront.
A limited supply of land for
development will mean fewer
opportunities to build new high-
specification towers. ‘In prime districts
the availability of land is really tapering
off,’ says Cheong. That’s likely to
indicate future upward pressure on
prices at the top end of the market.
The property market in China is so
firmly controlled that there is
considered to be no risk of a price
crash. ‘The market runs in three-year
cycles here,’ says James Macdonald,
head of China Research. ‘In mid-2015
the market started to pick up and by
October 2016 prices had risen 20-40%.’
Government restrictions, including
raising mortgage down payments in
Shanghai and local government control
of property prices in 20 core cities, mean growth is
expected to slow over the next 18 months.
The Savills market sector is new build, with 90%
of buyers Chinese residents. ‘We have the opposite
of a buy-to-let culture,’ says Macdonald. ‘People
buy flats when they can and leave them vacant
until they need them. Chinese nationals living
overseas also buy in preparation for their return.’
T
GLASSLYN, MOSMAN, AUSTRALIA
A stately federation residence with generous proportions and panoramic harbour views, set in sprawling
landscaped gardens. Bedrooms 5 Bathrooms 6 Price POA Contact Adam Ross,
PRICE
PREDICTIONS
Forecasts for
2017 predict up to
5% increases for
luxury apartments
in Hong Kong
In Singapore,
anticipated price
increases are
lower, at 2-3%
Growth is expected
to slow in China
during the next 18
months, due to
government
restrictions
Opportunities for luxury investors abound in South East Asia, with secure markets such
as Hong Kong and Singapore, but buyers need to stay one step ahead of legislation
Blowing hot and cold A S I A - P A C I F I C
Australia | Thailand
Malaysia | Singapore
Indonesia | Macau | Hong Kong
China | Vietnam