Real estate stress is brewing in Asian mkts other than China

SURGING INTEREST RATES and regulatory scrutiny are causing distress for builders and creditors in Asian economies from South Korea to Vietnam, highlighting the breadth of housing woes in a region overshadowed by China's crisis

While aggressive monetary tightening and the pandemic have had a more pronounced impact on commercial property in the US and Europe, it's residential housing that is under more strain in Asia.

One of the worst hit nations, Korea, saw the steepest home price slump in 25 years while a construction firm's repayment struggle has rekindled fears of repeating the credit market turmoil in 2022. "Countries that had high consumer debt or balance sheet burden will be areas that you want to focus on," said Kheng Siang Ng, head of Asia Pacific fixed income at State Street Global Advisors. "Korea is one of them. Housing markets have been softening."

Here are some places where property market risks have the potential to boil over in 2024:

South Korea

Korea's property market is showing the most strain after China in the region, with prices in 2023 falling by the most in a quarter of a century after years of growth. The weakness is the direct outcome of moves by the Bank of Korea – the first major Asian central central bank to kick off the current monetary tightening cycle in 2021 - to push its policy rate to a 15year high.