Asia-Pacific Residential Market Review: Key Highlights
Knight Frank's Asia-Pacific Residential Review Index for the second half of 2023 indicates that Singapore stands out as the best-performing market within the Asia-Pacific region, showcasing a significant year-over-year growth of 13.7%.
Indian Cities Among Top Performers
Several key Indian cities have demonstrated strong performance in the residential sector:
- Bengaluru: Secured the eighth position in the Asia-Pacific Residential Review, reporting a year-over-year growth of 7.1%.
- Mumbai: Followed closely, ranking ninth with a year-over-year growth of 7%.
- National Capital Region (NCR): Ranked eleventh, with a 6% year-over-year price increase during the same period.
According to Knight Frank's analysis, these three cities are projected to contribute to 60% of the total sales volume in the Indian market for the year 2023.
Market Dynamics in Bengaluru, Mumbai and NCR
- Bengaluru: The increased interest from developers outside the city has led to a 24% surge in new project launches during the second half of 2023. The city recorded sales of 27,799 residential units, with an average price of Rs 5,900 per square foot.
- Mumbai: A notable upswing in sales during the third quarter of 2023 can be attributed to heightened demand during festive periods such as Navratri, Dussehra, and Diwali. Mumbai witnessed sales of 46,073 homes in the latter half of 2023. The average price in the city is Rs 7,883 per square foot.
- NCR: In the second half of 2023, the region saw the sale of 29,888 units, with an average price of Rs 4,579 per square foot.
Regional Overview
The Asia-Pacific Residential Review Index for H2 2023 reveals that 21 out of 25 cities in the Asia-Pacific region experienced positive annual price growth. Singapore leads with a 13.7% year-over-year growth.
The Asia-Pacific Residential Review provides an in-depth analysis of the performance of mainstream residential markets in the region, catering specifically to investors.
Experts' Take
Shishir Baijal, Chairman and Managing Director of Knight Frank India, stated, "Residential property demand in India’s major cities has surged to its highest level in a decade, despite the increase in mortgage rates and property prices. In 2024, residential demand will still maintain momentum due to notable tailwinds like the anticipated decline in interest rates and comparatively robust economic growth.”
Conversely, Hong Kong's residential market lags behind, burdened by a large inventory of unsold units and high-interest rates. Rising mortgage rates have made homeownership more challenging for buyers, leading to increased caution.
Kevin Coppel, managing director at Knight Frank Asia-Pacific, noted, “The residential market experienced a surge in the past six months, following the FED’s decision to pause rate hikes, which encouraged potential buyers who had been waiting to make purchasing decisions. Due to persistent supply-side issues like labor shortages, rising input costs, and construction delays, prices have benefited in many cities throughout the Asia-Pacific area”. He added that cities such as Bengaluru, Singapore, Sydney, Brisbane, Perth, Manila, and Delhi have benefited from wealth effects, supply outpacing demand, and promising economic growth prospects.