The global energy shock has accentuated some of the risks in property markets across the Asia-Pacific. The performance of tourism and hotel industries, particularly in Thailand, has come under scrutiny, while there are concerns about the impact of higher interest rates on leasing and investment activity, especially in Australia.

However, the crisis has also focused attention on the strengths of the region’s real estate industry, which include premium offices and luxury homes, as well as signs of recovery in vulnerable markets.

The clearest evidence of a rebound is in Hong Kong. The dramatic revival in the city’s capital markets last year proved a powerful catalyst for a stronger recovery. In the first quarter of this year, Hong Kong maintained its position as the world’s top venue for initial public offerings (IPOs), underscoring the huge influx of mainland Chinese capital.

According to a report by Boston Consulting Group on May 27, Hong Kong narrowly overtook Switzerland last year to become the world’s largest cross-border wealth hub, with mainland flows accounting for around 60 per cent of assets under management.

The resurgence of the city’s financial sector proved a boon for the property market. Morgan Stanley predicts home values will rise a further 12 per cent this year, “backed by favourable supply/demand dynamics” and “tailwinds from capital and talent coming from the Middle East and mainland” China.

Midland Realty expects this year’s number of sales of new luxury homes worth more than HK$100 million (US$12.8 million) to exceed the record high of 109 in 2018 despite the government’s decision in February to increase the stamp duty rate for such transactions.