Asia Real Estate Investments Drop 13% Amid Delayed Rate Cuts & Market Repricing

• 6 August 2024
• International News
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The recent decline in real estate investments across the Asia Pacific can be attributed to several factors, including delayed interest rate cuts and economic volatility. The US$22.9 billion investment volume in Q2 2024 marks a significant retreat as investors await clearer signals from central banks regarding monetary policy adjustments. This wait-and-see approach has tempered investment activity and heightened market caution, according to Bloomberg dated 25 July 2024.

Hong Kong’s Plunge: The most pronounced impact was felt in Hong Kong, where investment volumes plummeted by 54%. The market has been grappling with an uptick in distressed assets, reflecting broader economic difficulties and geopolitical tensions. This situation has been exacerbated by macroeconomic uncertainties that deter investors from committing to large-scale property acquisitions.

Expected Repricing: Henry Chin​ ​head of research in Asia Pacific at CBRE​ highlights the expectation of continued market adjustments. “We anticipate further repricing this year, especially in Hong Kong, mainland China, and Singapore,” Chin remarked. This repricing trend suggests that investors might see more attractive entry points later in the year, as market corrections align prices more closely with underlying economic realities.

Australia & New Zealand Trends: In contrast, Australia and New Zealand are nearing the bottom of their pricing cycles. This positioning indicates that these markets may soon stabilise, presenting potential buying opportunities for investors looking for relatively undervalued assets in the Asia Pacific region.

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