IP Global Property Barometer Q2 2013: Jakarta ranked highest among the promising markets of Asia-Pacific
- Jakarta, with the fourth largest population in the world has attractive demographics for real estate investors
- The Australian economy is becoming two phase, with Queensland and the west propelled by the mining boom while federal and state budget cuts slow growth in the South East
- Kuala Lumpur remains one of Asia’s prime markets for investment
IP Global, a leading property investment company specialising in securing prime investment opportunities in emerging and developed markets around the world for a multi-market client base, is pleased to announce the release of its latest Property Barometer for Q2 2013. The Far East is in the spotlight this quarter with Jakarta, Indonesia, currently tipped as the brightest city for overseas real estate investment. Other cities IP Global is encouraging investors to watch closely include Australia’s Mackay and Kuala Lumpur in Malaysia.
According to the latest IP Global research, Jakarta offers great prospects for real estate investors, where a middle-class and affluent consumer population that is expected to double to 141 million by 2020 fuels the market. The luxury segment in the residential sector has seen especially strong growth with current yields at 9.5%, partly due to a lack of stock and the fact that only a few projects are due to come online this year.
Mackay is ranked number two, making it the hottest property market in Australia Here the market is underpinned by continuing expansion of the mining and export sectors and rapid population growth. Located within Queensland on the country’s east coast, the city boasts the highest long-term annual growth in house prices, driven by rising demand and local income 27% above the national average.
Elsewhere, the property market in Kuala Lumpur shows no sign of halting its strong performance in recent years with the all-house price index growing 8.3% in 2012. Combined with a favourable recent election, the high-speed rail link to Singapore is expected to precipitate a large population influx.
Paul Preston, Director and Head of IP Global Middle East commented on the barometer:
“Property investment cannot be viewed independently of a country’s demographic. Jakarta has some very impressive statistics, being part of the fourth largest national population in the world, and an ever-expanding middle-class income group. When combined with on-going urbanisation, the residential market is expected to maintain positive momentum. Another key element to look at is the local industry, and that is why we are seeing Mackay in Australia offering the most compelling investment opportunities, due to its booming mining and export sectors.”
In the fair category, Hong Kong has weathered the storm of the newly introduced property cooling measures, proving wrong analysts who were initially predicting price falls of as much as 20%. Year-to-date prices are still up by 2.6%, and strong local demand shows no sign of disappearing. Meanwhile, further east in Tokyo, a property market ‘renaissance’ is beginning to take shape as land prices are increasing for the first time in years. This is largely down to the forward-thinking reinflation policies of Prime Minister Shinzo Abe, which have caused the Nikkei to rally and the Yen to fall, making Japan more competitive internationally. This has led to a surge of European and American funds entering Tokyo, which in turn has seen land price rise across more than half of the city.
Melbourne is proving the thesis that the Australian economy is likely to become increasingly bipolar over the next year, with areas in Queensland and Western Australia propelled by the mining boom while federal and state budget cuts and the high dollar have limited growth in the south-east. In the coming months, the market is expected to underperform, due to the concerns over oversupply, made worse because of the large pipeline of homes currently under construction.
Making it into the cloudy category is Singapore, where oversupply coupled with waning demand means that the city-state is likely to see very little appreciation in the foreseeable future, if any. Also ‘overcast’ is Hanoi, due to the speculation of previous years driving an abundance of supply and overinflated prices. Yet another economy with a supply glut and suffering from a slowdown is Seoul, where apartment prices have fallen by 8.3% over the past two years.
For more information on this property barometer or for any general property-related enquiries, please send an email to [email protected].