WATCH: Breakthrough in US-China trade war
Stabilising US-China ties after nearly two years of a grinding trade war could help bolster the property market in Southeast Asia by 2020, according to industry players attending a conference in Beijing.
Uncertainty about future relations between the US and China in the midst of the continuing trade spat has destabilised emerging markets, pushing down Asian currencies over the past year and a half. This has deterred investors in overseas real estate, afraid that further depreciation would devalue their investment.
However, a new phase-one deal between Washington and Beijing, set to be signed this week, was revealed in December. According to developers, this will help bring some stability back to South-East Asian economies and their real estate markets.
While Asian currencies declined last year, dragged down by global market uncertainty, some exceptions, such as the Thai baht, have been a safe haven supported by a large current account surplus and foreign fund inflows.
In October, the currency of Thailand reached its strongest level since May 2013, at 30.187 per dollar. According to Precha Suphapetiporn, vice-president of the Thai Real Estate Sales and Marketing Association (RESAM), a strong appreciation is detrimental to the property market, making purchases more expensive for foreign buyers.
Other factors likely to boost the sector across the area include population and gross domestic product (GDP) growth; Influx of Chinese capital and stronger political stability. As mentioned at the conference, organised by the 2015 Beijing-based Uoolu cross-border real estate transaction platform.
"It was obvious that the region is growing rapidly in terms of the economy so things are very inviting," said Ismael Taib, Chinese business relations manager for SM Development Corporation, a Philippine real-estate residential builder.