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Investment outlook

Asia Pacific real estate 2019 outlook

Harry Tan
Head of Research, Real Estate, Asia Pacific
Night life in Tokyo

Among the developed Asia Pacific economies, Australia and Japan are expected to be the stand-out performers in 2019. Positive demographic dividends and more diversified growth are expected to continue driving an uninterrupted economic expansion in Australia. Similarly, the positive pass-through from Abenomics will likely continue strengthening the investment and consumption outlook in Japan, on top of ongoing stimulus from very supportive monetary and financial conditions. On the other hand, the more open and financial services dependent economies such as Hong Kong and Singapore may face more uneven growth prospects from a less certain manufacturing and export outlook. Overall, we expect slower but still resilient economic growth across Asia Pacific, by virtue of still relatively more accommodative monetary policies.

Over the short term, we anticipate the under-rented, principal cities of Sydney, Brisbane and Tokyo to deliver the best risk-adjusted returns. Tokyo will particularly continue to benefit from the boost to domestic demand in the run up to the Olympics and associated infrastructure investment and in turn, underscoring the already positive occupier outlook. Over the medium term, an increasing allocation to Chinese cities should boost overall portfolio performance, on account of positive structural megatrend drivers.