Is Multifamily Housing the Solution to Asia Pacific’s Housing Challenges? – Insights from JLL

Navigating Asia’s Rental Housing Boom: The Rise of Multifamily Properties – Insights from JLL’s Robert Anderson

Amidst global population growth, urbanization, and soaring rental costs, the shortage of housing has emerged as a critical issue worldwide. However, amidst these challenges, multifamily properties have emerged as a promising solution, particularly in the Asia Pacific region.

Multifamily properties, characterized by their ability to accommodate multiple households within a single building or complex, have gained prominence in Asia Pacific due to various social, economic, and cultural factors.

Despite an overall decline in real estate investments, the multifamily sector in the region has remained robust, with projections indicating a potential surge to $20 billion by 2030.

Leading the charge is Japan, boasting the most mature multifamily market in the region. With a strong foundation laid by Japan, other key markets such as China and Australia have also witnessed a notable uptick in multifamily transactions in recent years.

Navigating Unaffordability: Evolving Social Norms in Asia’s Housing Landscape

Asia, renowned for its bustling metropolises and densely populated urban centers, faces a persistent challenge of limited space compounded by soaring property prices. Hong Kong, often cited as the most expensive city for residential property purchases, epitomizes this struggle. Despite the scarcity of land, Asia’s urban areas are witnessing a resurgence in population growth, driven by post-pandemic reopening measures and a return to city life.

In such a landscape, the demand for rental properties in urban centers is reaching unprecedented levels. Multifamily residential complexes and high-rise apartments emerge as a practical and space-saving solution to accommodate the burgeoning population. These properties offer efficient utilization of limited space while addressing the pressing need for affordable housing options in densely populated areas.

Moreover, changing social norms and lifestyle preferences further underscore the relevance of multifamily residences in Asia. As urbanization continues to reshape communities, the traditional concept of homeownership is evolving. Young professionals and urban dwellers increasingly prioritize convenience, flexibility, and communal living over the traditional model of single-family homes.

Multifamily properties align with these shifting preferences by offering a range of amenities and communal spaces designed to foster community engagement and social interaction. From shared recreational facilities to co-working spaces and communal gardens, these developments cater to the diverse needs of modern urban dwellers.

Additionally, the rising cost of living and housing affordability concerns drive demand for rental properties among millennials and Gen Z. Multifamily residences present an attractive proposition for this demographic segment, offering the benefits of urban living without the financial burden of homeownership. With flexible lease terms and access to a vibrant community, multifamily living appeals to young professionals seeking an affordable yet enriching urban lifestyle experience.

Furthermore, the COVID-19 pandemic has accelerated the adoption of remote work and flexible arrangements, prompting individuals to reconsider their housing preferences. As remote work becomes more prevalent, proximity to city centers and urban amenities takes precedence over traditional factors such as commute times and proximity to workplaces. Multifamily properties, strategically located in prime urban locations, offer residents convenient access to transportation networks, lifestyle amenities, and employment opportunities.

In conclusion, the rise of multifamily residential complexes and high-rise apartments reflects a broader shift in housing preferences driven by urbanization, changing social norms, and evolving lifestyle choices. As Asia’s urban centers continue to expand and diversify, multifamily properties emerge as a pragmatic solution to address the growing demand for affordable, convenient, and community-oriented housing options in densely populated cities.

Is Multifamily the Solution to Asia Pacific’s Housing Challenges? Insights from JLL

As the demand for rental housing surges across the Asian region due to factors like population growth, aging demographics, and housing affordability constraints, multifamily properties emerge as a resilient and appealing investment avenue, according to Robert Anderson, Director – Head of Living, Asia Pacific Capital Markets at JLL.

The rapid urbanization and escalating rents, coupled with a persistent housing crisis, have heightened concerns about housing shortages in numerous major markets worldwide. However, amidst these challenges, multifamily properties stand out as a promising solution for addressing the housing crisis in the Asia Pacific region.

Multifamily properties are residential units designed to accommodate multiple households or families within a single building or complex. They have gained prominence in the Asia Pacific real estate landscape due to various social, economic, and cultural factors. Despite a collective decline in real estate investments this year, investments in multifamily properties have remained robust, with projections indicating a potential surge to $20 billion by 2030.

Leading the trend are markets like Japan, China, and Australia, where multifamily transactions have seen a notable uptick in recent years.

Unaffordability and Evolving Social Norms

Space scarcity is a defining characteristic of many Asian cities, with Hong Kong standing out as the most expensive city globally to purchase residential properties. Despite this challenge, Asia is home to some of the most densely populated urban centers worldwide. As post-pandemic measures prompt a return to urban areas, the demand for rental properties in these centers is expected to continue rising.

In such densely populated cities, multifamily residential complexes, including high-rise apartments, offer a practical, cost-effective, and space-efficient housing solution. They cater to the growing demand for housing while maximizing land utilization in urban cores.

Aging Population and Cultural Dynamics

Asia’s population is rapidly aging, with projections indicating that one in four individuals in the Asia Pacific region will be over 60 years old by 2050. This demographic shift is driving demand for senior living accommodations, a subset of multifamily properties designed to cater to the needs of older adults.

Moreover, many Asian societies value collectivism, social interaction, and strong family bonds. Multifamily properties align with these cultural values by facilitating multigenerational living arrangements and fostering social connections among residents. They provide shared amenities, communal spaces, and community activities, promoting social engagement and neighborly relationships.

In essence, multifamily properties offer the space and flexibility needed to maintain close family ties while sharing resources and responsibilities. This makes them an attractive housing option for individuals and families across diverse demographic segments in the Asia Pacific region.

Resiliency of Multifamily Properties

The allure of multifamily properties extends beyond their practicality; they have also showcased remarkable resilience in navigating economic turbulence and global uncertainties. Historical data from the National Multifamily Housing Council (NMHC) reveals that multifamily real estate investments have consistently outperformed other asset classes, such as office and retail properties, especially during periods of financial instability like the 2008 crisis.

Even amid recent economic challenges, multifamily investments have demonstrated their resilience. In the first half of 2023 alone, investments in this sector surged to $4 billion, marking a 2% year-on-year increase. This growth is particularly noteworthy considering the 24% decline in total real estate investment volumes across the region during the same period.

Multifamily properties offer investors enhanced risk-adjusted returns, with lower correlations to other asset classes. Their stable rental performance, driven by factors like population growth and housing affordability concerns, contributes significantly to their attractiveness as investment options.

The stability of multifamily properties stems from their inelastic occupier demand and the persistent housing shortages in metropolitan areas. Regardless of economic conditions, people always need a place to live. This consistent demand ensures stable occupancy rates and predictable rental income, making multifamily properties a secure investment choice for investors seeking stability and resilience in their portfolios.

Diversity of Market Developments

The Asia Pacific region is witnessing a diverse array of market developments, fueled by strong post-pandemic recovery and evolving policy landscapes, all of which are contributing to the growth of multifamily property investments.


Efforts by the federal government to address the “rental crisis” have led to increased incentives for Build-to-Rent (BTR) projects in Australia. Policy changes, including a reduction in the withholding tax rate for residential BTR projects from 30% to 15%, alongside increased depreciation rates for eligible BTR from 2.5% to 4%, have significantly enhanced the return profile for BTR development. Consequently, there has been a surge in development and investment interest in this sector.


China is experiencing a wave of institutionalisation, which is expected to drive substantial demand for multifamily properties. This trend, similar to that observed in the US multifamily market, fosters greater acceptance of multifamily products among consumers and allows operators to expand their presence within the housing market. The emergence of China real estate investment trusts (C-REITs) also holds promise for the multifamily market, particularly if these listed entities incorporate residential properties into their portfolios.

Moreover, the recent decision by China to no longer recognise degrees earned online from overseas institutions has resulted in a significant influx of Chinese students returning to Australia in 2023. This influx has substantially impacted rental demand and availability, with returning students becoming key renters in the market. A similar trend is observed in Hong Kong and Japan, where renting students from China are driving up demand for multifamily properties.


In Japan, amendments to laws governing energy consumption performance in buildings have incentivised developers to invest in multifamily properties that meet energy efficiency standards. Additionally, the expiration of The Productive Green Land Act has led to the termination of tax incentives on designated agricultural land. This has resulted in more land sites being earmarked for residential development, further expanding opportunities for multifamily property projects.

The Future of Multifamily Living in Asia Pacific

With a surge in demand for rental housing across the region, driven by factors such as population growth, ageing demographics, and housing affordability challenges, multifamily properties have emerged as a resilient and appealing investment avenue.

These trends are expected to fuel the market’s expansion, positioning multifamily residential investment as an attractive option for investors seeking to leverage the opportunities arising from the evolving real estate dynamics in Asia Pacific.

Greg Swanson
Greg Swanson
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