Breakthrough in US-China trade war is good news for southeast Asian property markets, say developers
- The phase-one deal set to be signed this week should bring some stability back to economies in the region, said speakers at a property conference in Beijing
- Uncertainty caused by the trade war has undermined some of the region’s currencies, deterring foreign investors from buying property in case of further depreciation
A stabilisation in relations between the US and China after almost two years of their bruising trade war will help bolster Southeast Asia’s property market in 2020, according to industry players attending a conference in Beijing.
Uncertainty over the future of US-China relations amid the ongoing trade spat has destabilised emerging markets, pushing many Asian currencies down over the past year and a half. This has deterred overseas property investors, who worried that further depreciation would devalue their investment.
But in December a potential phase-one deal between Washington and Beijing was announced, which looks set to be signed this week. This will help bring back some stability to southeast Asian economies, and their real estate markets, according to developers.
“We all know in terms of the macro economy, the trade war with the US caused concern and, with that, emerging-market currencies were a little bit vulnerable last year. With that looking to resolve itself at the end of last year, I think that puts Southeast Asia in a really good spot, because all of the currencies have started to stabilise,” said James Kibble, co-founder of Selo Group, which develops and manages real estate on Lombok island, Indonesia.
By the end of this year Selo Group’s first development, Selong Selo Residences and Resort, is scheduled for completion, offering 60 high-end villas.
“[This year] we are very positive … that in Southeast Asia there is a really strong capital appreciation,” he said at a real estate summit held in the Chinese capital on Saturday.
While most Asian currencies declined last year, dragged down by uncertainties in the global market, there were some exceptions, such as the Thai baht, which is seen as a safe haven helped by a strong current account surplus and foreign fund inflows.