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Cornell Real Estate Review

Abstract

Global investors who seek high returns or who wish to diversify by investing in the Far East often consider placing capital in Hong Kong or Singapore due to higher market transparency and governmental regulation than other Asian economies. Although the two markets do have many similarities, understanding the growth factors of each market will help foreign investors be better informed as to which of the two robust markets is more aligned with their investment strategy.

This paper analyzes supply and demand, assesses real estate investment opportunities, and compares and contrasts growth in different sectors of the real estate industry in these two cities. In doing so, the investment allure that each of these markets possess may be further dissected to provide guidance for future regional investments.

The two market analyses are performed in the classic top-down approach beginning with a comparison of macroeconomic similarities. Next, a 10-year retrospective since 1997 provides a general view of the long term trend. The market size and distribution analysis statistically examines the markets’ similarities in terms of size and distribution. Then, the yield and growth in four different sectors are analyzed. In order to understand the local differences of each sector in these two markets, we will discuss the details in the market dynamics section, and finally we will discuss the source of capital in the Capital Flow Trends and deduce the investment attractiveness and differences associated with each market.

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