From Australia to Hong Kong: Not one Asia-Pacific housing market spared as coronavirus knocks investor confidence
- Analysts agree that not one property market in the region will be spared from flagging demand caused by the health crisis
- Investment into housing markets is likely to be muted further by weakened demand from tenants, that will lead to lower rents
The deep global recession will lead to significantly lower home sales this year across Asia-Pacific as economies grapple with an unprecedented downturn brought on by the Covid-19 pandemic.
While it is difficult to precisely quantify the slump, analysts agree that not one property market in the region will be spared.
“Given the nature of the pandemic and the sudden shock to real estate activity, with projections of a recessionary environment across most regional economies, it is probable that the loss in buyer confidence [caused by] the uncertain economic outlook, job losses and weaker household balance sheets will result in significantly lower housing transaction volumes this year,” said Harry Tan, head of research, Asia-Pacific, at property investment manager Nuveen Real Estate.
Investment into housing markets is likely to be muted further by weaker demand from tenants, that will lead to lower rents.
“The housing market hasn’t been spared when it comes to the drop in confidence,” said Kenneth Kent, general manager at property listing website Squarefoot.com.hk.
The potential severity of the decline can be seen in first-quarter data, and anecdotal evidence from property agents.
In Singapore, the number of homes sold in the first quarter of this year fell 11.7 per cent to 4,309 units from the fourth quarter of 2019.
In Hong Kong, sales of new homes plunged to 2,262 deals in the first quarter of the year, lower by more than half from a year earlier, according to Midland Realty.