A Volatile Asian Real Estate Sector

Worldwide investors and financial specialists have advised on diminishing spending on commercial real estate in Asia Pacific as the sector’s unstable stance post Covid19 remains unknown.
The number of commercial property sales and acquisitions including office, retail and hotels, was about 65% of the levels documented in 2018 and 2019. However, the sales numbers in North and South America dipped only 25% in the main portion of the year, while those in Africa, Europe and the Middle East underwent minimal rate changes due to some lucrative investments and deals.
According to international real estate mogul Hamad Alwazzan , it is normal for foreign investors to take caution and rethink every dime as the world is facing a financial shock left by the Covid-19 outbreak. “It is in moments like this, that the impact of those investors makes itself felt because the markets become unstable as if everyone is trying to stay far away from this particular sector”, added the Wharton graduate.
A rise in cases following the Covid19 outbreak specifically in China and Singapore forced severe border monitoring and lockdowns in the beginning of the pandemic, which made it harder for investors to close deals and limited developers who found themselves also unable to start their projects. “Everything halted and confidence was lost even after those countries decided to reopen their economies even though they remained cautious in easing travel restrictions amid a hike in virus cases that threatens to disrupt containment efforts and push them towards a new lockdown”, he explained.
In Mr Alwazzan’s opinion, legislators may need to consider including limitations on foreign inflows to stabilize the market and reduce its volatility given the importance of the real estate sector to most Asian economies. “The value of real estate is equal to more than 100% of gross domestic product in Hong Kong, and about 47% in Singapore, something needs to change to bring confidence back to the region because so far, it its clear that for the Asia-Pacific region, many challenges remain”, he concluded.

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