Asia Pacific's property market dominated by Asian buyers

The real estate markets in the Asia Pacific are dominated by Asian buyers, with transaction volumes in the first half of the year increased 40 percent, according to a new research report released by Jones Lang LaSalle (JLL).

JLL said property transaction volumes in the Asia Pacific region for the first half of the year totalled US$38.8 billion, compared to US$27.7 billion over the same period last year.

While market sentiment in Asia may be affected by fears of a double dip in Europe and USA, Asian buyers with available cash and low debt are expected to continue supporting Asia Pacific’s direct investment real estate markets.

The global economic outlook and growth prospects have differed between the regions in the previous 18 months. The IMF also expressed concerns that capital flows from EU and other low-growth areas could have a destabilising effect as they flow into high-growth areas, especially in Asia. However, the region has witnessed that global funds have been net sellers of Asian properties, majority of which have been bought by Asian buyers.

Dr. Megan Walters, research head for Asia Pacific Capital Markets said that “despite economic uncertainty elsewhere, it is expected that Asia will continue to see good rates of growth in the market based on strong domestic demand and low levels of debt. Office capital values have been supported by the growth of rental values, with stabilising or compressing yields experienced in most markets.”

Stuart Crow, head of Asia Pacific Capital markets, commented: “With a number of significant transactions expected this quarter, it certainly feels like market fundamentals are improving in the region. Clients continue to favour the core markets of Hong Kong, Singapore, Sydney/Melbourne and Tokyo and are largely focused on well-leased core or value added opportunities.”