Luxury homes, premium offices underpin Asian property’s resilience

Concerns about the Asia-Pacific region’s vulnerability to the global energy crisis abound. In a report on May 15, JPMorgan said that “the impact from the situation in the Middle East has evolved from a supply shock to a cost shock” as “rising input costs are now propagating through the entire supply chain – from upstream feedstocks to end-market consumer goods”.

The fallout from the energy crisis, which has been more severe in Asia because of the region’s heavy dependence on oil and gas imports from the Middle East, has rippled through financial markets. Last week, the Indian rupee dropped to a new low of nearly 97 to the US dollar, heaping pressure on the country’s central bank to raise interest rates.

In Japan, Prime Minister Sanae Takaichi reversed course on May 18 when she called for a supplementary budget to fund emergency relief measures in response to the surge in energy prices. The prospect of heavier bond issuance helped drive the yield on Japan’s 30-year bond to just over 4 per cent, the highest level since 1999. The Bank of Japan is expected to raise interest rates to the symbolically important level of 1 per cent next month.