Regional strength

With the rest of the world engulfed by economic uncertainty, industry analysts are again looking east for good news in the property sector next year. There are very few signs of an upswing elsewhere, especially in debt-troubled Europe, but traditional safe havens, such as Singapore and Australia, continue to lure overseas investors, especially Chinese.

The region, where property prices weakened slightly in the latter part of this year, sees strong prospects and features in Knight Frank's report that looks ahead. It notes that despite cooling measures in previously booming Asian markets, investors would not be deterred.

This is based on the premise that the Asia-Pacific region will continue to be the main engine of growth in the world economy. "With moves towards a resolution in the euro-zone [crisis], we expect the Asia-Pacific region's economies and property markets to enjoy the prolonged benefits, as the balance of world economic power tips towards Asia," the Knight Frank report says.

Nicholas Holt, Knight Frank research director for Asia-Pacific, points out that more countries in the region saw positive price growth in their respective residential markets this year, so the momentum may already be there.

"The ongoing difficulties in the world economy, including a slowdown across Asia-Pacific markets, will continue to have an impact on residential markets in the region. With much uncertainty in the world, the ongoing euro-zone crisis, the sluggish recovery in the US and a slowdown in China, sentiment has been impacted. That said, underlying drivers will continue to support demand for residential property in developing Asia and the volatile performance of other asset classes will continue to attract investors who trust hard assets in the form of property," Holt says.

Singapore-based property investment firm Pacific Star Group says residential markets in Asia will continue to hold up relatively well.