$31.2 Billion Deals Propels China to the Top of 2018 List
An analysis revealed that China topped all markets in the Asia Pacific in sales of properties generating income last year, good for the second year in a row. Mingtiandi reported that the report was provided by Real Capital Analysis (RCA).
Mainland China sales reached $31.2 billion in 2018, which was actually 14 percent lower from its previous amount--$36.2 billion in 2017. This, however, was still better than their closest Asian neighbors Japan and Australia, both of which turned in amounts of $28.8 billion.
Asia is actually stuck in a period of decline even with the income property market rising. The 2018 decrease compared to 2017 is actually quicker in nature by 57 percent. This is due in part to stricter regulations among the regions' most bullish economies, despite the best interests these regulations may represent.
China's GDP posted its lowest rate--at 1990 levels--in 2018. That year was also the lowest for its IP investment volume. Despite the gloomy outlook, however, China's investors were the continents brightest, being the largest buyers of income generating a property.
Japan, meanwhile, is having issues all on its own due to soaring occupancy rates. Rents continue to rise and are expected to do so, particularly in Tokyo and Osaka. Rethink Tokyo reported that this is not really all that bad since it means vacancy rates will continue to drop for the country and problems concerning over-supply won't be felt.
Nagoya has actually emerged as one of the country's brightest corners, with 75% of offices all occupied and general occupancy rates being the highest its been since 1993. Even CBRE expected these relatively expensive rental spaces to multiply by 2.8% even as demolished properties are replaced by more office relocation.
Perhaps, the problem lies in Japan's preference for new, shiny things. A study showed that the real estate sector is also affected by this preference. Old buildings are torn down to make way into newer locations and higher-yielding properties.
Japan has actually lagged behind Australia, even as China dominated the list. Hong Kong and South Korea placed below the country, which had ranked second in 2017. South Korea was aided by the rise of its sales volume to the tune of $22.7 billion.
Asian markets, in general, performed better this year than in the last, although the concerns about the market's inherent volatility as well as prevailing global economic conditions remained.