The global mood has become decidedly gloomier over the last few months. Casting our minds back to the beginning of the year, the world economy was expected to grow by around 4% in 2011 and Asia Pacific by over 5%. Well it now looks like global growth for this year will only be about 3% with the US economy turning pretty sluggish and Europe perilously close to recession. Here in AP, growth expectations have also been shaved to around 4.5%, proof of our linkage to the rest of the world. Across the region’s property markets we’re also seeing momentum starting to slow, with some markets – notably Hong Kong and Singapore – already seeing some declines in rents.
So looking ahead, the first few months of 2012 could be quite challenging. But here in AP we should not lose sight of the region’s strengths – government policy flexibility, a competitive cost base, ongoing urbanisation and other structural drivers – that will help the region to bounce back from global economic storms and increase its attractiveness over time to both investors and occupiers. Barring an economic meltdown in the West, we still expect rents and prices to increase further in most markets during 2012 (residential being an exception), although the rate of growth is very likely to slow from the pace we’ve seen over the last year or two.
So there’s still plenty of reason for end-of-year cheer here in AP!
The research team hopes that you’ve enjoyed our new blog series. Do send us your feedback on our blogs and topics you would like to know more about. We’re taking a short break until 9th January, so until then, enjoy the festive season and best wishes for 2012.
About the author
Dr Jane Murray is the Head of Research, Jones Lang LaSalle Asia Pacific.