With the exception of China, most Asia Pacific (APAC) markets started to recover from the effects of regional COVID restrictions in 2022. However, as investors look ahead to 2023, they are now faced with a new set of threats that are no less dangerous: high inflation, rising interest rates, unmanageable levels of public and private sector debt, and an impending global recession.
The goal of this 17th edition of Emerging Trends in Real Estate, a collaborative project of PwC and the Urban Land Institute (ULI), is to throw light on trends in real estate investment and development as well as other concerns in APAC.
Singapore came out on top in this year's rankings for both investment prospects and city development prospects.also moved upward.
Key Points found :
Achieving Net Zero
Many regional investment strategies now include it as a key component of their plans to achieve net zero carbon emissions. The 2021 Sustainable Financial Disclosure Regulation (SFDR) of the European Union, in particular, emphasizes the need for compliance with international reporting requirements. Regionally, real estate carbon efficiency standards continue to be low, with Australia and Singapore far and out ahead of the pack.
Real estate transactions in Asia are declining, with the third quarter of 2022 seeing the lowest third-quarter total in the Asia Pacific since a decade.
The number of deals and buyers also decreased dramatically, and because the value of terminated deals during the quarter was roughly 20% of total transactions, there is little reason to believe that this trend will soon reverse. The only significant market to defy the decreasing trend was Singapore, where investment volumes soared 47% YOY to US$9.1 billion.
Inflation raises the risk of development
One local developer in Singapore reported an increase in construction expenses of "easily 15%" in 2022, primarily due to higher material costs. Also, the lack of workers brought on by stricter labor restrictions has led to building delays and greater prices because of higher compensation.