With China’s property market cooling after years of rapid growth, 2014 has seen real estate in the emerging markets come into focus. As the year draws to a close, global real estate portal Lamudi looks back at an eventful 12 months for property sectors in frontier countries.
In Asia, China saw its real estate market hit a slump early in the year, with falling property prices and a drop in construction activity. However elsewhere in the region, the high growth seen in property markets in Southeast Asia in recent years continued throughout 2014, largely due to strong macroeconomic fundamentals.
In Indonesia, growth in the property sector continues to be fuelled by a rapidly expanding middle class, while in the Philippines, the real estate market benefited from sustained demand for commercial real estate from the business process outsourcing (BPO) sector.
Jose Romarx Salas, Head of Research and Consulting at Pinnacle Real Estate Consulting Services, recently told Lamudi that property prices in the Philippines hit pre-Asian crisis levels last year in nominal terms. “But this is not an indication that a bubble is forming as there is real demand for houses and real dollars coming from the BPO sector and overseas Filipino worker remittances. These are pushing up consumer demand for housing,” Salas said.
On the back of economic and political reforms, many emerging Asian real estate markets have caught the eye of international investors. Myanmar property sector has been characterized by strong demand outstripping supply, which has pushed up property prices, particularly in central Yangon. Meanwhile, the expansion of Sri Lanka tourism industry has opened up new opportunities for investors and developers alike, with arrivals rising nearly 10 percent in November this year.
In the Middle East, Saudi Arabia, continues to grapple with its housing shortage. In March the Ministry of Housing announced a new scheme to address the shortfall, with about US$67 billion set aside to build 500,000 homes over the coming years. The shortage, which is largely due to rapid population growth in the Kingdom, has pushed up property prices, according to recent research into Riyadh’s residential market from global real estate firm Knight Frank.