As the year draws to a close, Knight Frank has put together a four part round up which looks how residential property markets have fared across the Asia Pacific region in 2016 and the outlook for 2017.
The final part of this series looks at India, Australia and Cambodia.
Dr. Samantak Das, Chief Economist & National Research Director, Knight Frank India
The Government gave clarity on important reforms regarding Goods and Services Tax (GST), Real Estate Regulatory Act (RERA) and REITs during H1 2016. These reforms definitely created positive ripples for various stakeholders. As a result, residential markets of the major Indian cities grew after three subdued years and the office market improved and maintained pace. However, the recent demonetisation move by the Government is expected to substantially hit transactions during Q4 2016. The resale market is expected to be hit harder than the primary market in the residential sector. Any green shoots of recovery that were there in this sector during H1 2016 will lie low for at least the next six months.
From mid-2017 onwards, however, we expect the market will discover a new normal in volume and price. With a falling interest rate, higher liquidity and RERA and GST in place, India’s real estate sector is expected to be more evolved, transparent and corporatised. The sector has potential for growth and it will be supported by a larger institutional funding at competitive rates.
Matt Whitby, Head of Research & Consulting, Knight Frank Australia
The services sector, including technology and creative services industries, will continue to drive activity in Australia’s major office markets in 2017, while the growth from mining investment declines. Investment in Australia, particularly office and hotel buildings, have been growing strongly. This is supported by the relatively higher yields still to be found in the market. Sydney’s office leasing market is expected to be the best rental performer globally over the next few years to the end of 2019.
There continues to be divergence in the short-term market conditions and rental growth performance in favour of Sydney and Melbourne. However, we expect investment and occupier demand to pick up in Brisbane in 2017 as investors begin to embrace more risk and seek higher relative returns. Co-working will be one of the biggest growth sectors in the office markets across the global cities, with Sydney and Melbourne leading the way in Australia.
In the retail sector, global brands will continue to expand their presence in Australia, however, location and foot traffic are critical to their success.
Ross Wheble, Country Manager, Knight Frank Cambodia
With the exception of Myanmar, Cambodia continued to outperform Southeast Asian countries including Singapore, Malaysia, Thailand, Vietnam, the Philippines, Indonesia, Laos and Brunei, during 2016 in economic terms. According to the Asian Development Bank, Cambodia’s GDP growth is forecast to be 7.1% in 2017, underpinning demand for real estate across all sub-sectors.
In 2016, increasing foreign investment into the Kingdom enabled Knight Frank Cambodia to strengthen its position as one of the country’s leading professional real estate advisors, working with some of the top developers, investors and multinational companies in Cambodia and within the APAC region.
Looking ahead to 2017, Knight Frank has secured exclusive contracts for major developments to be launched into the international market. We are excited to be working with global brands on some of the country’s most prestigious projects, elevating Cambodia to compete in the global arena.
This is the last of four Asia-Pacific pieces summing up real estate markets in 2016 with an outlook for 2017.
For Research queries related to the Asia Pacific region please contact Nicholas Holt.
*Source: Asian Development Bank(https://www.adb.org/countries/cambodia/economy)