Realty markets booming in Asia-Pacific region: GIA

The global commercial real estate market is recovering steadily due to increased availability of capital and resurgence in manufacturing activity. However, the residential market continues to remain sluggish, particularly in few developed countries. On the other hand, construction boom in the housing and commercial property sector is driving real estate investments in Asia-Pacific region, according to a research report titled "Real Estate: A Global Outlook" announced by Global Industry Analysts.

The global economic recession dented prospects in the construction sector due to stringent credit conditions and decreased business confidence. Residential buildings segment remained depressed due to high unemployment rates, while industrial and commercial properties witnessed drop in occupancy rates, tenant demand, and rentals, the report titled ‘Real Estate: A Global Outlook’.

 

Mentioning that the residential housing market has registered reduced home ownerships, new constructions and eroding of property values, the report said, global real estate market is slowly recovering from the economic recession driven by strengthening fundamentals, increased capital availability and availability of alternative sources of finance. Improved business spending, revival in manufacturing activity and increased capital flows in real estate market are expected to bestow steady growth prospects in the global real estate market, GIA, an independent global analyst,  said in its report.

Recession effect

With the effect of recession ebbing, the real estate and construction industry recovered in few US markets and strong resurgence witnessed in Canada and China. However, a number of owners of commercial or home properties are expected to continue facing difficult conditions as the value of properties is still below the cost of purchase, and various mortgage debts are at higher levels than the value of underlying properties. Commercial mortgage foreclosures and delinquencies are also expected to continue affecting the industry.

On a corporate level, the industry is expected to witness consolidation of development and construction firms, which would primarily focus on debt reduction, cost control, as well as risk management. Investments in transportation, education facilities, highways, healthcare facilities, and government offices would provide opportunities to commercial construction firms, the survey report further said.

While European real estate markets are being beleaguered by a number of challenges such as austerity measures imposed by struggling economies, market regulations, weak credit markets and a looming sovereign debt crisis, concerns over struggling economies such as Spain, Portugal and Italy continue to dog the market, the report said. 

Despite the prevailing grim market situation, availability of equity is expected to increase in future with funds flowing in from foreign investors, private equity funds and institutions. However, most of the investment is expected to be directed towards large economically robust cities such as Paris and London. 

Asian realty

Real estate industry across Asian countries is witnessing robust growth owing to the buoyant economies. Some of the major real estate markets in Asia include China, Australia, New Zealand, India, Hong Kong, Thailand and Vietnam. Increasing purchasing power of people and increased commercial construction activity favor growth in the region's real estate industry.

About Global Industry Analysts

Global Industry Analysts, Inc., (GIA) is a leading publisher of off-the-shelf market research. Founded in 1987, the company currently employs over 800 people worldwide. Annually, GIA publishes more than 1300 full-scale research reports and analyzes 40,000+ market and technology trends while monitoring more than 126,000 Companies worldwide.  GIA serves over 9500 clients in 27 countries.