Property markets in the Asia-Pacific region are likely to remain attractive despite heightened uncertainty over monetary policy after the US Federal Reserve delivered its first interest rate increase in more than three years this month, analysts say, with several asset classes and sectors expected to draw investor interest.

Property markets in the Asia-Pacific region are likely to remain attractive despite heightened uncertainty over monetary policy after the US Federal Reserve delivered its first interest rate increase in more than three years this month, analysts say, with several asset classes and sectors expected to draw investor interest.

“We’ve seen volumes, specifically cross-border volumes in the region, increase by around 30 per cent to date,” said Emily Fell, senior director for living sectors in Asia-Pacific capital markets at Savills. “I think, as opposed to seeing a pullback generally, it’s more a change in strategy and a pivot in sector [focus].” Mainland China was the region’s most active real estate market, with investment surging 154 per cent year on year to US$13 billion in the second quarter of 2026, according to financial data provider MSCI. Japan ranked second with US$9.7 billion worth of deals, followed by Australia with US$8 billion.

“I think, as opposed to seeing a pullback generally, it’s more a change in strategy and a pivot in sector [focus].” Mainland China was the region’s most active real estate market, with investment surging 154 per cent year on year to US$13 billion in the second quarter of 2026, according to financial data provider MSCI. Japan ranked second with US$9.7 billion worth of deals, followed by Australia with US$8 billion.

Hong Kong ranked fifth with US$2.5 billion, but recorded the strongest growth at 172 per cent.

Across the region, commercial real estate transactions rose 20 per cent to US$46.1 billion in the same period, according to MSCI. By asset class, office properties attracted the most investment at US$15.7 billion, followed by retail at US$11.9 billion and industrial at US$9.7 billion.

The market to focus on would be South Korea, where the ageing population will, over the next decade, provide very strong fundamentals for that sector’s growthEmily Fell, Savills Fell identified Sydney’s co-living segment and South Korea’s senior living assets as among the markets with the strongest growth potential amid continued uncertainty over monetary policy.

“The Sydney co-living segment is focusing on the refurbishment of hotels or offices into co-living spaces,” she said.

“Sydney’s central business district is particularly attractive because it has very clear planning pathways, favourable tax treatment and a wide demand pool, and remains structurally undersupplied. That’s a sector where we’re seeing a huge amount of capital interest.” At the same time, South Korea’s rapidly ageing population is creating opportunities for investors.

One deal highlighting investor confidence in the sector came in March, when Hyundai Haim Asset Management, backed by Hyundai Marine and Fire Insurance, signed a contract to acquire the Mokdong Artist Center in Seoul.

The site would be redeveloped into a 400-room senior living complex in a project worth 500 billion won (US$368 million), according to Savills.

Hong Kong – where monetary policy moves largely in lockstep with the US – was likely to continue attracting capital from investors in Singapore, Malaysia and elsewhere seeking property bargains, said Neil Brookes, head of Asia-Pacific capital markets at Savills.

“Buyers here are not necessarily chasing yield, so they’re not coming in looking at the cost of debt at, say, 4.5 per cent,” Brookes said. “But what we have seen are discounts of 40 to 50 per cent to peak pricing.” Looking at the last 30 major deals in the first half of the year, most involved distressed assets, including receivership sales, he added.

“So, I think a lot of groups are coming in because they see that there are really good discounts on previous pricing available,” Brookes said.

As of early last week, Southeast Asian investors had emerged as the largest non-local buyers of Hong Kong commercial property this year, led by Singapore-based capital, according to Savills.

As of early last week, Southeast Asian investors had emerged as the largest non-local buyers of Hong Kong commercial property this year, led by Singapore-based capital, according to Savills.

Out of the HK$30.36 billion worth of commercial property deals, Southeast Asian investors contributed HK$3.37 billion, or more than 11 per cent of the total value, Savills said. When it comes to Asia, investors are driven by GDP growth and significant structural demographic trends which are not impacted by Fed ratesTim Graham, JLL Capital Markets Beyond defensive investment strategies, the overall fundamentals of Asian property markets remained strong and could cushion any impact from further monetary tightening, said Tim Graham, global lead of international and strategic capital at JLL Capital Markets.

“The fundamentals of the market look strong heading into the fourth quarter and 2027,” Graham said.

“On overall real estate sentiment, I maintain the view that when it comes to Asia, investors are driven by GDP [gross domestic product] growth and significant structural demographic trends which are not impacted by Fed rates, namely the rental market.” Graham said office markets with strong underlying fundamentals and limited development pipelines offered strong rental growth prospects and remained attractive to cross-border capital.

“We are also seeing increased allocations to living sectors across the region, including purpose-built student accommodation, where demand is supported by structural drivers rather than cyclical factors,” he said.

“These sectors offer investors resilient occupancy and income through periods of greater macroeconomic uncertainty.” By Cheryl Arcibal