Property in the Emerging Markets

Markets in Asia, Latin America and the Middle East are experiencing booming real estate sectors, fueled by a growing middle-class and strong economic performance. Southeast Asian cities are seeing the fastest increase in apartment, condominium and commercial property prices across Asia, according to property consultants Knight Frank.

The company’s Prime Asia Development Land Index - analyzing property prices across the continent - reveals that over the past two years, prime residential and office development prices in Asian increased by 50.4 percent and 38.3 percent respectively.

The high-end property segment in Southeast Asia, Latin America, the Middle East and Africa is growing, and is forecast to continue this expansion in the coming decade. Over the past two years, house prices in Jakarta have grown by 184 percent, fuelled by Indonesia’s fast-growing middle class and the increasing demand for high-end property in the city. Furthermore, capital cities Manila and Yangon have also been highlighted by experts as cities with property markets to watch, in terms of residential, industrial and commercial real estate.

With a strong economy and improvement in areas like transparency and governance, more investors have turned their attention to the Philippines’ capital. Manila has a young demographic, receives a significant amount of capital from Filipinos working overseas and a similar workforce culture to the west. Its residential, retail and office sectors all have strong investment prospects. Global bank HSBC last year named Mexico the “the safest bet for investors in the region”.

In a study of the top emerging markets from 2013, the bank chose Mexico ahead of Brazil and Argentina as Latin America’s investment hotspot. Investors see signs of change in Mexico, with drug-related violence and crime on the decline and businesses benefiting from reforms enacted since the 2012 elections. Foreign investors are attracted to Mexico due to perks such as value for money, which is more favorable than in the US and Europe, and appealing exchange rates.

A number of countries, expected to become economic powerhouses of the future, have been grouped into the so-called MINT – Mexico, Indonesia, Nigeria and Turkey – and PINE countries - the Philippines, Indonesia, Nigeria and Ethiopia. The young populations, increasing wealth and economic stability and attractive geographical locations make these particularly good options for investment, infrastructure development, and construction.