Pockets of opportunity in Apac real estate from higher borrowing costs
A large number of distressed sales is unlikely, but rising pressures from higher financing costs could force more willing sellers to the markets
AS MAJOR central banks outside of Japan tighten their monetary policies to counter rising inflation in recent months, borrowing costs have increased sharply in most developed Asian markets.
Banks are becoming more selective, restricting their lending conditions amid strong global economic headwinds. Higher borrowing costs and tighter credit market conditions have resulted in a significant slowdown of investment activities in Asia-Pacific (Apac) real estate, with total transaction volumes in 2022 down by nearly 27 per cent, compared with the previous year.
The widening spread between buyers’ and sellers’ pricing expectations was among the major factors leading to lower transaction volumes.
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