Apac real estate market to remain 'resilient' despite rising inflation: Urban Land Institute

By Atiqah Mokhtar / EdgeProp Singapore | June 9, 2022 6:36 PM SGT
Cap rates in the Asia Pacific region are expected to remain stable (Photo: Albert Chua/The Edge Singapore)
Join our  Telegram  channel and follow our  Facebook  for the latest update.
SINGAPORE (EDGEPROP) - The Urban Land Institute (ULI) is projecting a positive trajectory for the Asia Pacific (Apac) real estate market over the next three years, pointing towards a sustainable recovery following the pandemic. This is despite expectations of faster inflation rates in the region's largest economies, notes David Faulkner, president of ULI Asia Pacific.
ULI’s Apac real estate economic forecast for 2022 to 2024, which covers six major regional markets - Hong Kong, Singapore, Shanghai, Tokyo, Seoul and Sydney - shows that Australia is expected to lead the pack this year in terms of growth with a projected GDP expansion of 4.48% for 2022, well above the long-term average of 2.35%.
Japan comes in second place, with a growth forecast of 2.25% for 2022, five times higher than the 0.45% record in 2021. Elsewhere, Hong Kong, Singapore, China and South Korea are expected to record slower growth rates of 1.0%, 3.35%, 4.85%, and 2.0% respectively.
ADVERTISEMENT
Expectations of faster inflation have tempered the upbeat sentiment on Apac’s outlook, states ULI. Out of the six markets surveyed, with the exception of Singapore and South Korea, the rest are anticipated to see accelerated inflation rates in 2022 before these taper off to their long-term averages by 2024.
Nonetheless, the Apac real estate market is expected to weather through the short-term headwinds. “Against this backdrop, we are expecting the real estate sector to remain resilient in the next few years, with largely stable cap rates across the office, logistics, and retail segments,” ULI's Faulkner says.
For offices, ULI notes that Tokyo is forecasted to have an office cap rate of 2.60% this year, which is the lowest in the region. "The rate will likely dip to just 2.30% by 2024, reflecting continued robust demand for office assets domestically," ULI states.
ULI also highlights that for the logistics sector, Singapore is the most attractive market among the six markets surveyed, with the highest estimated cap rate of 6.40% this year.
ADVERTISEMENT
Follow Us
Follow our channels to receive property news updates 24/7 round the clock.
EdgeProp Telegram
EdgeProp Facebook
Subscribe to our newsletter
Search Articles
Follow Us On
Our Sites
Edgeprop.sg (previously known as The Edge Property Singapore) – is the best property portal for home-seekers, buyers, investors and real estate agents alike in Singapore. On EdgeProp, you will be able to find all the latest news and views, informational guides, historical transactions and rental searches, and research data and analysis.
Whether you are looking to buy, sell or rent apartments, condominiums, executive condos, HDB flats, landed houses or commercial properties, we bring you Singapore’s the most comprehensive and up-to-date property news and thousands of listings to facilitate your property decisions.
Make better decisions with our easy-to-use free and paid tools. The Edge Fair Value tool lets users calculate the fair value of a property and find properties below market value in Singapore. Meanwhile, discover all things en bloc, including Singapore en bloc news, trends and our En Bloc Calculator, which helps to determine the probability of a Singapore project being put up for collective sale.
Web Version 4.6.34
Aside from that, EdgeProp also offers a market trend tracker that lets you access historical property data, sales volume and compare how similar properties are selling, a heat map that lets you find out where all Singapore’s most popular property sales locations are, a HDB lease tool that lets you calculate your HDB tenure, an affordability calculator, and a property watch list to track your preferred Singapore property by project or location, as well as new launches.
On the lookout for undervalued property or buying to rent? EdgeProp’s powerful search filters let you personalise your property-seeking experience – whether you are looking for a property near MRT stations, amenities like schools and childcare centres, or a good-value condo with a sea view – so that you find exactly what you are looking for.