In Asia’s real estate sector, South Korea is a star performer. In the first half of this year, the region’s fourth-largest economy recorded the second-highest volume of commercial real estate transactions after Japan. Moreover, Seoul experienced the strongest growth in prime residential prices in annualised terms in the second quarter among 46 markets tracked by Knight Frank.
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Singapore is another top performer. Office vacancy rates are among the lowest in the region while the city state was one of the top five most actively traded cities in Asia’s commercial property market in 2023 and 2024. In the residential sector, the average price of second-hand private homes rose to a fresh high in the second quarter, while prices in the secondary market of the public housing system have risen for 21 straight months.
In India, one of Asia’s fastest-growing property markets, leasing activity in the office sector in the leading cities hit an all-time high in the first half of this year, while net take-up of industrial and logistics space in 2024 reached its highest level ever, data from JLL shows. In the residential sector, sales exceeded 300,000 units in 2023 and 2024 as demand shifted towards premium and luxury homes in a sign of an increasingly sophisticated market.
However, these top performers are not without their challenges. Housing affordability is a growing source of concern, especially given the failure or ineffectiveness of government policies to tackle the root of the problem.
The South Korean government has sent confusing signals. Last month, it announced a clampdown on foreign homebuyers – who account for a tiny fraction of home purchases – in an effort to dampen speculative demand in Seoul’s buoyant residential market. Then, it announced a lowering of the loan-to-value cap on mortgage loans and pledged to almost double the supply of new homes in the coming years.
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The problem is that the price of flats in Seoul has risen despite a succession of measures to take the heat out of the market. Home values in the city have risen for 31 consecutive weeks.