With Singapore and China leading the charge for outbound property investment, Asian investors are taking over the world one city at a time.
Text by Mira Soyza
China’s economic slowdown, commodity slump, currency gyrations, plunging oil prices, falling stock markets, credit crisis—talk of a downturn is in the air and the property market has started feeling the pinch. The looming uncertainty and volatility of the market has property investors, especially those from the developed economy looking outside of their country for a more stable market to shelter their money. In 2013, Hong Kong, Mainland China and Singapore’s outbound real estate investment alone accounted for 71% of the total amount invested by the Asian region, according to a report by Colliers International.
In the past few years, the Chinese have been pouring billions of their money into the Asian property market. Pushed by China’s slowing economy and devalued currency, Chinese investors started looking into other cities to convert their yuan into bricks and mortar. Australian cities like Melbourne, Sydney and Brisbane are a clear favourite among the Mainlanders; other sought-after investment destinations include Manhattan in New York City.
Investors naturally seek safe havens and lower risk exposure. Says David Brown, Managing Director of Meridien Group: “Residential property has proven to be the lowest risk of all asset classes. So you can expect that there will be greater demand for residential property in low risk markets that still provide a good balance of yield/returns and capital growth potential. And, naturally, Australia stands out as an investment destination for Asian investors”.
Australia is in fact the first choice for Singaporean (and Malaysian) global property investors as they regard it as a good and safe investment location. A recent report by CBRE noted that Singapore—not China— led the Asian outbound real estate investment last year with USD19.3 billion; followed by China at USD17.6 billion.