DESPITE market turbulence given the global macro-economic uncertainty in 2019, the Asia- Pacific residential markets were balanced by falling interest rates and policies aimed at supporting the affordable market.
This trend continued in the pandemic year as the Asia-Pacific residential markets remained its stable trend in 2H 2020, according to Knight Frank’s Asia-Pacific Residential Review H2 2020 report with 14 of the 24 regional indices tracked by Knight Frank recording either stable or increased year-on-year (yoy) price growth with an average annual price increase of 1.9%.
“The main driver behind this has been the low interest rate environment which has buffered the weakening economic environment stemming from the aftershocks post COVID-19’s peak around the middle of the year here in Asia-Pacific,” Knight Frank Malaysia’s associate director (international residential project marketing) Dominic Heaton-Watson pointed out.
As for Singapore, housing prices surprised in 2H 2020 with its central core region falling 0.2% yoy and rest of central region rising 5.1% on better than-expected demand seen post the city-states Circuit Breaker between April to June 2020.
This was also despite the government tweaking a regulation loophole on option issuances that had slightly inflated sales data in 3Q 2020.
In 2020, India had witnessed the most stringent lockdown globally which brought economic activities to a standstill and severely impacted sales in 1H 2020.
However, as the economy started to open with better preparedness for the pandemic, residential sales in 2H 2020 jumped by 60% compared to 1H 2020 in the top eight cities of India.
Based on Knight Frank’s report, housing prices in Australia declined in 2H 2020, recording a 1.3% yoy mainstream growth average across its four major capitals of Sydney, Melbourne, Brisbane, and Perth.
On the local front, National Property Information Centre (NAPIC) in its 1H 2020 report revealed that Malaysia’s residential overhang inched up 3.3% to 31,661 unsold completed units worth RM20.03 bil during 1H 2020 from 30,664 units valued at RM18.82 bil in 1H 2019. More than half of the current overhang stock is made up of condominiums and apartments.
During the period under review, newly launched homes priced from RM100,000 and RM500,000 dominated the market during the period under review, according to NAPIC’s statement.
In addition, homes price at RM400,00 and below accounted for 92% of total sales while those priced between RM200,000 and RM300,000 lead supply with 4,022 units (30%).
Malaysia’s property market remained soft in 2020. However, it sees better outlook on affordable housing in 1H 2021 as the Government has re-introduced the Home Ownership Campaign (HOC) under Penjana.
Meanwhile, low interest rates in most residential markets remained to be a key driver of price growth in Asia-Pacific through 2020, and is expected to continue through 2021.
The global property consultant remains optimistic on the general outlook for the region despite the pandemic’s toll on economic activity in the recent months. – Jan 21, 2020
