Bangkok, Thailand has seen an 18.1% growth in residential rental prices on a year-on-year basis, according to JLL.
Alexander Spatari | Moment | Getty Images
Singapore and Hong Kong are generally considered Asia’s more vibrant real estate markets. But some up-and-coming cities are giving these traditional hubs a run for their money, with some even beating them on rental yields.
Among the known, established property markets, Hong Kong was the only one to make it to the top five in a list dominated by lesser-known cities, according to a recent report by realty services firm JLL.
“We remain bullish longer-term on more established markets like Hong Kong, but primarily we see more conspicuous rental growth in some of the region’s more developing markets including Ho Chi Minh City, Jakarta, Bangkok and Manila,” JLL Asia-Pacific Chief Research Officer Roddy Allan told Tech Zone Daily Make It.
While rents in Asia-Pacific were largely stable in the first quarter of 2024, “supported by resilient leasing demand for high-quality properties and as return-to office rates and expatriate arrivals improved,” certain cities saw sharp growth, according to the JLL report.
The following four cities have led the recovery in rental growth in Asia so far this year:
Bangkok, Thailand
Residential rental growth in Q1 2024 (y/y): +18.1%
Average price to rent: THB 8,292 (about $226) per square meter annually
“Inflated” selling prices, household debts and strong interest rates, have stoked the demand for rentals, according to the report.
By the end of 2024, a total of 2,800 units from 12 projects are set to be added to Bangkok’s market, which is expected to fuel rent growth even further, the report said.
Ho Chi Minh City, Vietnam
Residential rental growth in Q1 2024 (y/y): +5.9%
Average price to rent: $120 psm annually
“Vietnam’s largest city, Ho Chi Minh City, was also one of the region’s [best] performing markets from a residential perspective,” according to Allan. Rents in the city grew 5.9% on a year-on-year basis in the first quarter of 2024.
This rental growth has been influenced by the stronger rent prices recorded in new high-quality offerings in the city, according to the report.
“We also see new supply coming online in the lower-price segment and ongoing rates pressures will help demand,” said Allan.
Jakarta, Indonesia
Residential rental growth in Q1 2024 (y/y): +4.8%
Average price to rent: IDR 3,214,555 (about $200) psm annually
Despite the sales slowdown, demand for renting “remains robust” in the city, particularly at the upper end of the market, Allan told Tech Zone Daily Make It.
“We expect new launches to remain muted in Jakarta throughout 2024 which will drive demand for high quality spaces across the city,” he said.
Manila, Philippines
Residential rental growth in Q1 2024 (y/y): +0.8%
Average price to rent: PHP 9,984 (about $172) psm annually
Manila’s residential rental market grew in Q1, as demand from executives and foreigners kept its steady rise amid a recovery in return-to-office rates, according to the report.
Leasing demand is expected to remain stable as return-to-office policies improve further into 2024, the report said.
While these lesser know markets have been on an upswing in terms of rentals, Asia’s more mature markets have declined. Singapore’s residential rental market has dropped sharply, down 15.7% on a year-on-year basis. Shanghai has fallen 3% from the previous year.
“Rents in Mainland China remain a little subdued due to the number of high-end apartments available for lease,” Allan told Tech Zone Daily Make It. “Singapore has a similar situation of ample new stock,” he said.
“Over the longer term, we expect to see rents recover in Mainland China and Singapore due to more muted supply and a recovery in expatriate and wider demand for leasing of luxury residential.”
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