Chinese mainland property market remains resilient

Cao Qian
The Chinese mainland sees investment volumes falling 15 percent in the second quarter year on year compared with an average decline of 39 percent across the Asia Pacific region. 
Cao Qian

The COVID-19 pandemic dealt a major blow to real estate investment in the Asia Pacific region in the first half of 2020 with the Chinese mainland one of the most resilient markets, according to data from global property adviser JLL.

Investment volumes registered across the region fell 32 percent during the first six months from the same period a year ago, with second quarter activity dropping 39 percent year on year, accelerating from a 26 percent decrease in the first quarter.

Singapore and Hong Kong suffered the largest year-on-year investment declines during the April-June period, down 68 percent and 65 percent, respectively, while drops in Australia, down 58 percent, and South Korea, down 45 percent, were offset by a resumption of activity in the latter part of the second quarter.

"The sharp decline in deal activity in the second quarter is reflective of the lack of willing sellers and the general uncertainty that exists around market recovery," said Stuart Crow, CEO of Capital Markets, JLL Asia Pacific. "Liquidity remains very high, and we expect transaction activity to rebound in the second half as economies further reopen and pricing expectations are adjusted in certain markets."

Notably, the Chinese mainland market was one of the most resilient in the region, where transaction volumes fell 15 percent year on year in the second quarter, recovering from a 62 percent tumble registered in the January-March period.

For the first half, total investment in the Chinese mainland was 96.3 billion yuan (US$13.74 billion), with Shanghai remaining the most active investment market, accounting for 42.3 percent of total volume, followed by Beijing's 31.4 percent share. 

The appetite for office assets continued to be high, attracting 70 percent of total investment.

Investment activity in Japan also showed some resilience, falling 20 percent in the second quarter, mainly due to transactions in the multi-family sector as well as strong domestic liquidity, JLL data indicated.

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