Deteriorating Asia Pacific commercial property conditions cause a sharp drop in market sentiment
Driven primarily by the sluggish outlook of the economy
Confidence in the commercial property market in Asia Pacific has substantially dropped, prompted primarily by the decelerating worldwide economy, reported APAC Real Estate, citing the RICS Q3 2019 Asia Pacific Commercial Property Monitor study.
“After a period of fairly subdued momentum, which coincided with the onset of trade and geopolitical uncertainty, sentiment has turned decisively negative,” revealed the report.
Nevertheless, the participants of the study felt hopeful about the capital and rental values, which should either be stable or growing within the next 12 months, except for Hong Kong.
More: ADB urges Asia Pacific countries to spend at least $1.5 trillion yearly on infrastructure
The US-China trade dispute and the ongoing political unrest has driven the drastic market slump in Hong Kong.
Meanwhile, the same trade war has caused Vietnam to prosper, with the market experiencing strong demand for industrial properties, as supply chains search for an alternative to China
The RICS study revealed declining market sentiment in China and Korea, yet growing confidence in the commercial market in Asia Pacific. It also uncovered a decline in market supply, signifying late-stage in the property cycle.
As for the rest of the world, central banks have been reducing the interest rates to counter the concerns surrounding the sluggish economic outlook.
“Against this backdrop, it is unlikely that there will be a sharp pick-up in momentum across commercial property markets in the near-term,” concluded the report.
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