Singapore is now ranked No. 1 for real estate investment prospects in terms of price increases in 2020. Hong Kong, buffeted by months of violent anti-government protests, has plunged to the bottom of the list from 14th place in 2019. That’s according to an Urban Land Institute and PricewaterhouseCoopers LLP report released Tuesday into property trends in the region.
The city-state has benefited from an uptick in interest among investors who are avoiding China and Hong Kong, which are seen as “geopolitical flashpoints.” Singapore ranked second-to-last in the list of 22 centers as recently as 2017, beaten out by cities including Tokyo, Bangalore and Sydney as vacancies surged and rents declined. In 2017, Hong Kong ranked 18th.
Over the past few quarters, apartment prices have rebounded in Singapore, signaling resilience in the residential market, while the office sector has largely absorbed the oversupply.
Hong Kong’s struggles bode well for Singapore, at least in the short term, Urban Land Institute CEO Ed Walter said. “A lot of theory in investing is less about what was, versus what is or what is going to be,” he said.
Hong Kong’s plunge to the least-favored real estate investment destination next year comes as the city’s tourism and retail sectors take a battering, impacting economic growth.
Investors scouting for deals, however, will be disappointed. Commercial and residential property owners alike will probably “opt to sit tight and wait out the storm” given they’re in general not highly leveraged, the report said.
From a purely residential-investment outlook for 2020, Ho Chi Minh City is a bright spot, according to the report, which canvassed 463 real estate executives. Bangkok, Singapore, Shenzhen and Sydney round out the top five.
This article was originally published in Bloomberg:
https://www.bloomberg.com/news/articles/2019-11-12/singapore-beats-out-hong-kong-for-property-investment-prospects