Thought Leadership

Despite rapid growth in inbound demand in recent years driven by a sharp increase in overseas visitors, Japan’s retail and hotel markets remain overwhelmingly driven by domestic demand.

Therefore, while a recovery in inbound tourism is still some time away, Japan can be said to have rapid recovery potential, should domestic demand return.

CBRE believes the return of domestic demand is imminent, with pent-up demand steadily accumulating due to restrained consumption and various benefits and incentives provided by the government. 

This demand is likely to materialise in the form of consumption for higher-end goods and services, trends that auger well for Japan’s retail and hotel sectors, especially the higher-end segments.

This article was originally published in https://www.cbre.com/

H 1 2021 transaction volumes were close to the six monthly average observed over the past five years

Office and industrial sales lead the New Zealand market The top three largest sales above 100 million were office assets

Vacant land/development sites show a lift in sales volumes

Singapore based investors were the most active of the offshore groups, with a smaller proportion of investment by Malaysian and Australian buyers

Investment activity is dominated by private buyers 52 followed by institutions 34 and syndicates 7 However, privates are net sellers, while institutions and syndicates are net buyers

This article was originally published in https://www.cbre.com/

• Compared with an average of over 3,500 units launched over the last three quarters, developers slowed down and launched a total of 2,356 private residential units in Q2/2021.
• With fewer new launches, the total new sales volume fell 15.1% quarter-on-quarter (QoQ) to 2,966 units in Q2/2021.
• The sales momentum in the secondary market continued to pick up in Q2, with total resale volume rising by 19.0% QoQ to a new record high of 5,483 units.
• The Urban Redevelopment Authority’s (URA) property price index of residential properties rose by 0.8% QoQ in Q2, slowing down from the 3.3% QoQ increase in Q1. This was largely because prices of landed homes ended their short-lived growth with a 0.3% QoQ decline, while non-landed homes saw a slower increase of 1.1% QoQ in Q2.
• The average prices of Savills’ basket of high-end non-landed private residential projects also saw a moderated increase of 0.4% QoQ to S$2,434 per sq ft in Q2.
• Unless there is serious contagion arising from China Evergrande, prices are expected to rise by 5.5% year-on-year (YoY) in 2021 with another 5% in 2022.

This article was originally published in https://www.savills.com/

As residential prices increase across the world, so too do transaction volumes. Commercial residential transactions for multifamily increased to the largest sector by investment volumes, at 28% of all transactions, overtaking offices for the first time in the first half of 2021. End-user residential also returned to pre-pandemic transaction levels nearly as soon as property markets reopened. The strength of residential property markets shows that home isn’t just where the heart is. 

Global real estate investment underwent a major shift in the first half of 2021 as the multifamily residential sector overtook offices to become the largest sector globally for the first time since records began in 2007, when considering deals over $2.5 million. Over the first six months of 2021, $136 billion was invested in residential, 35% higher than the same period in 2020 and 4.1% higher than office transaction volumes. Growth was driven by the global interest in the strong fundamentals for the residential sector. Many locations remain severely undersupplied for appropriate housing, particularly to meet the demand from younger people moving to urban centres.

In the end-user residential market, there were converging factors driving increased transaction volumes in many locations. From the race for space to the shift to working from home, many buyers globally decided that their current homes weren’t working for them. As soon as they were able, buyers made the choice to move to new properties, assisted by record low interest rates and government support for property markets. Across the 15 cities analysed for this article, 80% of the locations have seen transaction volumes above 2019 figures. 

A significant number of properties that transacted were purchased by mortgaged homeowners as price growth squeezed out first-time buyers while boosting the buying power of current owners. Roughly 45% of UK new buyers put their plans to buy on hold in 2020, as Covid-19 landed a double blow of rising house prices and constrained personal finances. The number of first home buyers taking out new home loans in Australia dropped to its lowest level in eight months in June 2021 to 13,869, though the number of home loans for all owner-occupiers fell in June as well, as Australia battles a new wave of Covid-19. 

This article was originally published in https://www.savills.com/