APAC | Banks shrug off commercial property risks for now

The unprecedented nature of the coronavirus pandemic has led to prolonged travel restrictions and social distancing measures. These restrictions have taken a toll on economic activity in the region, with several economies in particular experiencing very large GDP declines. While sequential growth has rebounded, output in many APAC economies
remains below the pre-crisis level of Q4 2019.

What you will learn:

• APAC commercial property prices were down around 3% on average in 2020, after a 1% rise in 2019.
• Across individual markets, the pandemic’s impact on CRE prices is mixed. Singapore, Japan, and Hong Kong have been the hardest hit, whereas South Korea, China, and Indonesia have seen modest gains. Meanwhile, Hong Kong’s market is showing signs of a recovery after large price falls in recent years.
• While credit risks in CRE loans have risen, APAC banks are generally well capitalised to cope with CRE-related losses.