RCA Insights

Asia Pacific Capital Trends 2016 Review: China Roars

By on February 6th, 2017

Investment volume in Asia Pacific fell 14% YOY in 2016, as weakness in Japan and Australia offset stronger performances by China and most other Asian markets, the new edition of Asia Pacific Capital Trends shows. China became the region’s largest investment market for income-producing real estate for the first time in 2016.

Volumes in China rose 32% YOY in Q4’16, helping to push up 2016 activity by 10% YOY. While development remains a prominent feature of China’s property market, higher deal volumes for standing assets are a sign of the maturity and depth of its investment market.

1702 APCT main-01China also became the Asia Pacific region’s top destination for foreign investors in 2016 and the value of transactions by foreign investors has doubled over the last five years. Another facet of the country’s robust growth is the expansion of Chinese real estate investors and developers abroad; this volume grew 51% YOY in 2016.

Of the top ten most active transaction markets in Asia Pacific, six grew in 2016 compared with 2015. Transaction volumes in Japan and Australia, the region’s #2 and #3 markets, respectively, fell by more than 30% as aggressive pricing reined in activity.

Development sites remain the most popular investment across Asia Pacific, particularly in China and Hong Kong. Development site sales rose 27% YOY. Among the main income-producing property types, the only positive growth was for apartments, up 18%.

At the market level, Seoul jumped up the ranking of the most active Asia Pacific markets to take the #4 slot behind Tokyo, Shanghai and Hong Kong. Transaction volume in Seoul grew by 140% YOY; four other cities in the top 25 also recorded volume growth of more than 100%.

If you are a current RCA subscriber log into your account to download the 2016 Year in Review report.