![](\"http:\/\/i2.wp.com\/www.siamlandbank.com\/propertynews\/wp-content\/uploads\/2016\/01\/The-Saigon-River-in-Ho-Chi-Minh-City-which-is-once-again-going-through-a-property-boom.png?fit=740%2C444\")
\nSoutheast Asia\u2019s key property markets are undergoing a period of transition
\nThe Saigon River in Ho Chi Minh City, which is once again going through a property boom
\nWith political machinations, China\u2019s travails and economic sluggishness impacting markets around the region, 2015 was an overall slow year for Asian property sectors
\nThe belief that nothing is permanent is firmly entrenched in many eastern philosophies. Even so, the recent slowdown in Asian economies and real estate markets has undoubtedly been a shock to the system following a boom unprecedented in length and proportion.
\nSince the turn of the millennium, rock-bottom interest rates, booming economies and the steady growth of consumer classes with spare money to invest in bricks and mortar combined to fuel something of a property miracle in the region. Indeed, it seemed that perpetual forward momentum in Asia\u2019s property sector was as much of a fixture as the ancient teachings of Confucius.
\nAfter several years of double-digit percentage increases in property prices in many of the region\u2019s markets, however, 2015 was a year that could most kindly be described as a holding pattern.
\nWith the exception of a few (admittedly major) hiccups along the way \u2013 the dramatic bursting of Vietnam\u2019s property bubble being one of these \u2013 major markets in the region have largely been on a steep upward curve. But in the last couple of years, reality has increasingly begun to bite.
\n\u201cWe\u2019ve been on a pretty extended bull run in many parts of this region,\u201d says Nicholas Holt, Asia Pacific head of research at Knight Frank. \u201cIt had to burn out to a certain degree, and it has.\u201d
\nIs corruption restricting Malaysia\u2019s real estate sector\u2019s potential to move ahead its ASEAN neighbours?
\nHolt, however, goes on to emphasise the extremity of the previous market highs in the context of the current regional slowdown.
\n\u201cFrom the outside it might look as though several countries in the region are experiencing trouble, but in reality there remains huge grounds for optimism,\u201d he continues. \u201cYou can\u2019t keep having 10-20 percent house price rises every year. There\u2019s still growth and largely solid foundations in property markets \u2013 even in countries perceived to be in the doldrums \u2013 so it is far from a disaster.\u201d
\nAnother point experts are united in highlighting is the differing drivers impacting each market. Thus, while wider issues such as the strengthening US greenback and the stuttering economy in China resonate throughout the region, other market influences vary wildly from country to country.
\nPolitical stasis or instability has certainly been a factor in a lacklustre year.
\nIn Thailand, a second year of military rule has not halted a slide in the economy and previously healthy property markets, especially in Phuket, have performed poorly, according to Holt.
\nOver the border in Malaysia, disaffection with the corruption-tainted government of Prime Minister Najib Razak has caused jitters among potential investors.
\nIt was rather a gloomy year for Singapore\u2019s property market as cooling measures continue to bite
\nIn Singapore, meanwhile, vote-winning pledges made in the lead-up to this year\u2019s general election such as making it harder for foreigners to achieve permanent residency and the continued maintenance of robust cooling measures, have hardly served to jump-start a residential property market that has seen seven consecutive quarters of decline.
\nIn its latest World Residential Market Report, global real estate services provider Savills refers to the ailing market in the Lion City. Noting that transaction levels are down by 53.8 percent year-on-year and that prices for residential property have fallen by up to 6.7 percent, the report states: \u201cThese [cooling]measures, coupled with a general slowing in Singapore\u2019s economy has resulted in significant reduction in transaction levels and falling prices in the prime residential market.\u201d
\nThe most disappointing performer of the year, however, has been Indonesia. After riding a wave of optimism into power, President Joko Widodo has, many feel, had a poor first year in office. His government has been accused of flip-flopping following several policy U-turns, damaging investor confidence. Controversial plans to introduce a 20 percent luxury tax on properties valued at more than INR2 billion (USD145,560), for instance, went down badly with developers and investors alike.
\nJakarta\u2019s upward trajectory hit a roadblock due to President Widodo\u2019s poorly received first year in office
\n\u201cThe Indonesian economy has lost quite a bit of momentum and will continue to perform below potential in the near term,\u201d explains Sigrid Zialcita, the Singapore-based managing director of research at Cushman & Wakefield. \u201cIt will be vital for President Widodo to accelerate the necessary reforms to create a more business-friendly environment in order to spur growth.\u201d
\nOther, non-political, forces have also hindered the region\u2019s poor performers. In Thailand, the retreat of Russian investors due to the falling rouble and a slowdown in Chinese investment has arguably hit the mass market in the country\u2019s coveted resort destinations. Malaysia\u2019s problems, meanwhile, have been exacerbated by the struggles of Iskandar Malaysia \u2013 the main southern development corridor in the state of Johor \u2013 which has been plagued by stalled projects, scrapped development plans, oversupply and the wait-and-see approach adopted by foreign, primarily Singaporean, buyers.
\nPhuket, one of Thailand\u2019s major markets, generally performed poorly over the past year due to the Kingdom\u2019s political woes and lacklustre economic performance
\nAnalysts commonly cite oversupply as a reason for sluggishness around the region.
\n\u201cWe do have an oversupply in a number of areas,\u201d says Clayton Wade, managing director of Premier Homes, a leading real estate firm based in Pattaya, Thailand. \u201cHowever, as long as there are emerging investor markets, such as the Chinese, there is confidence that the slack will eventually be picked up.\u201d
\nThere was mixed fortunes too during 2015 for the region\u2019s so-called \u201cfrontier\u201d markets. With its relaxed foreign ownership laws and upsurge in high quality residential development, Cambodia\u2019s capital Phnom Penh has become a favourite with adventurous investors from a range of countries including Taiwan, China, Japan, Singapore and Hong Kong. The country\u2019s often fractuous political climate, questions of sustainability and a disappointing uptake on new office stock over the last year are all seen as significant minus points.
\nIn Myanmar, the nationwide elections held at the end of 2015 were a huge factor in a very slow year for the country\u2019s property sector. Experts, however, are confident that a period of political stability will give the real estate market the kick-start it requires.
\nIt is hoped that Myanmar will make progress following the recent general election
\n\u201cIn markets worldwide a general election often causes a slowdown in activity as people hold off from making investment decisions until the future political and economic environment is clearer,\u201d says Richard Emerson, country manager for Savills Myanmar. \u201cWe expect the market to recover as investors position themselves to benefit from the country\u2019s enormous future potential.\u201d
\nYet while the region-wide boom looks, conclusively, to be over, two countries in particular enjoyed an impressive 2015 \u2013 namely the Philippines and Vietnam.
\nThe Philippines has continued to be a solid performer and although analysts are predicting a slight slowdown in growth, they see plenty to be positive about \u2013 especially in an office market likely to be the beneficiary of a thriving BPO (business process outsourcing) sector.
\n\u201cThe growth pillar in the Philippines, its BPO industry, is powering ahead thanks to sound economic management, a stable political landscape and a large young and well-educate population,\u201d says Zialcita of Cushman and Wakefield. \u201cThe next five years could still see BPO companies enlarging their footprint across the country to ensure high occupancies and a platform for long-term moderate rental growth of more than 5 percent.\u201d
\nThe Philippines was one of 2015\u2019s biggest success real estate stories in 2015 due to its robust BPO sector
\nThe year\u2019s other major success story is Vietnam, which is riding into another boom with construction starting in its economic hub, Ho Chi Minh City (HCMC), on two of the world\u2019s tallest skyscrapers and buyers snapping up new projects fast at locations around the country including HCMC, Hanoi and Danang. This retrenchment after the crisis of just a few years ago has been due to various factors including state purchase of billions of dollars worth of non-performing loans, stronger financial requirements on developers and government stimulus.
\nAnother boon has been moves to open up the country\u2019s property market which saw the government relax strict rules on investment by foreign firms, foreign buyers and \u201cViet Kieu\u201d, the overseas Vietnamese whose families fled their homeland when the communist north conquered the US-backed south in 1975.
\n\u201cWe are very optimistic about the forthcoming few years,\u201d says Dung Duong, a director of research at CBRE Vietnam. \u201cThe property market in Vietnam has been supported by a stable economy and, due to the growing strength in the US dollar, the Vietnam dong has become one of the strongest currencies in the Asia Pacific region. Both decreasing interest rates and a strong currency are expected to attract foreign investors.\u201d
\nThe ASEAN Economic Community was formally launched on 31 December 2015
\nLooking ahead to 2016 many analysts forecast another relatively flat year for most of the region\u2019s property markets. The Chinese economy is likely to continue to wobble, potentially impacting outward investment by Chinese while the strengthening US dollar is expected to see interest rates forced up across Asia \u2013 something that is also likely to staunch the stellar growth of recent years.
\n\u201cIt is an interesting point in the cycle,\u201d concludes Knight Frank\u2019s Holt. \u201cCountries are certainly feeling the slowdown. However, any ripples from China have largely been offset by the healthy state of the dollar. The situation is a little slower than before, that\u2019s for certain, but it is far from a disaster.\u201d
\nWith the ASEAN Economic Community (AEC) \u2013 a cross border trade agreement between the nations of ASEAN now officially implemented, shifts in the property markets of member countries are virtually certain. In a region as reliably dynamic as Asia, more flux is only to be expected.
\nProperty picks for 2016
\nThailand<\/p>\n