<a href="https://www.apartments.com.au/developments/collingwood-vic-3066">Collingwood</a>’s northern edge continues to sharpen its reputation as one of Melbourne’s most compelling cultural precincts, where established creative institutions, leading hospitality, and independent fashion converge within a tightly held inner-city neighbourhood.

Set within this evolving pocket, <a href="https://www.apartments.com.au/new-apartments/derby-street-by-milieu-collingwood-4-derby-street-collingwood-vic-3066">Derby Street by Milieu</a> draws on a location that balances proximity to some of the inner north’s most influential destinations with the quieter, tree-lined character that defines the streets edging East Melbourne. Positioned just moments from both Smith and Gertrude Streets, the address sits on the periphery of Collingwood’s cultural core, offering immediate access without the intensity of its busiest frontages.&nbsp;

[smartcode_project:default project_id=145576 project_image_fid=355945]

Gertrude Street, in particular, anchors the area’s identity as a destination for Melbourne’s leading food, art and fashion. Within a short walk, venues such as Marion, Cutler &amp; Co, IDES and the Builders Arms Hotel define a tightly curated dining scene with enduring citywide appeal, complemented by a strong fashion and retail presence including Havn, Le Labo and a selection of independent boutiques.

Nearby, institutions such as the Australian Print Workshop and Collingwood Yards sustain a constant rhythm of exhibitions, performances and creative output, embedding art and culture into the everyday fabric of the neighbourhood.

Smith Street, running parallel, extends this offering with a broader mix of hospitality and nightlife, maintaining its status as one of Melbourne’s most active inner-urban strips.

Beyond these high-energy streets, the immediate surrounds shift in tone. Derby Street and its neighbouring blocks are defined by low-rise heritage terraces, mature trees and a settled residential character. Fitzroy Gardens and Carlton Gardens are both within walking distance, alongside the Royal Exhibition Building and Melbourne Museum, bringing together green space and cultural landmarks within minutes of home.

[smartcode_project:default project_id=145576 project_image_fid=355985]

Connectivity remains a key advantage. The CBD sits within easy reach, accessible by tram along Smith Street in around 20 minutes, while also remaining close enough to walk or cycle, supported by the inner north’s established bike network.&nbsp;

<a href="https://www.apartments.com.au/developers/milieu-property">Milieu</a>’s long-standing connection to Collingwood underpins the project’s approach. With a portfolio that includes multiple nearby developments across Bedford, Peel and Napier Streets, the developer brings a sustained understanding of the area’s character and evolution. Derby Street continues this trajectory as a collaboration with award-winning Melbourne-based <a href="https://www.apartments.com.au/architects/studio-bright">Studio Bright</a>, marking the practice’s first multi-residential project in the inner north and reflecting a shared focus on design integrity and contextual response.&nbsp;

Balancing connection to the neighbourhood with a sense of seclusion and refuge, Derby Street by Milieu embodies a level of care and craft typically reserved for single residential projects. Comprising 22 residences across six storeys, with two to four-bedroom configurations priced from $1.15 million, the project is currently under construction with completion expected in late 2027.&nbsp;

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Joel Robinson

Derby Street by Milieu, at the top end of Collingwood

A rare new apartment development in the Blue Mountains is the latest in a string of State Significant Development Applications submitted through the New South Wales Government's Housing Delivery Authority.

A total of 270 apartments are being proposed for the 1.16-hectare site at <a href="https://www.apartments.com.au/new-apartments/blue-mountains-alpine-retreat-142-150-narrow-neck-road-katoomba-nsw-2780">142–150 Narrow Neck Road in Katoomba</a>, a parcel of land adjoining the former Katoomba Golf Course. The site was acquired for $3.85 million in 2021 by private developer VDM Prime.

The apartments, comprising a mix of serviced apartments, affordable housing, and traditional build-to-sell product, will be spread across eight low-rise buildings, along with a separate building for a new restaurant, arranged around a green spine that leads to a central park.

<img alt="Katoomba" data-entity-type="file" data-entity-uuid="ee9a2072-f465-44f1-9076-80c9c8ecca02" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-22%20at%209.20.21%E2%80%AFAM.png?VersionId=4bT0vQ7j_syl65wcrJmHGm3m5pTvwrY_" />

The Urban Design Report by Atlas Urban says the vision is to create a "contemporary mountain precinct that is responsive to its escarpment landscape, heritage character, and community context."

"The development responds to the current housing supply and affordability challenges identified under the NSW Housing Delivery Authority (HDA), providing a balanced mix of standard, affordable, and short-stay accommodation," the report noted.

"By introducing a variety of dwelling types and tenures, the proposal supports intergenerational living, local workforce retention, and greater housing choice within an area constrained by topography, heritage, and environmental protections."

Of the 270 units proposed, 52 will be serviced apartments. The remainder will comprise 54 studios, 121 one-bedroom units, 39 two-bedroom apartments, and four three- to four-bedroom residences.

<img alt="Katoomba" data-entity-type="file" data-entity-uuid="f704508d-1bdf-4170-955d-0256652402a7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-22%20at%209.56.49%E2%80%AFAM.png?VersionId=TzarHMO4gTOsblCqsbJQkvMqWj9nu2Au" />

The Design Report, by VDM Prime and appointed architect Antoniades Architects, noted that the design seeks to "provide a built form outcome that is highly considered, respectful and contextually fitting, whilst contributing positively to an evolving precinct."

"The site offers three frontages and the opportunity to provide a meaningful interface with the public domain environment. the design has a sympathetic response to streetscape and the green open space that surrounds the site."

The report states that the buildings are broken up to establish an appropriate bulk and scale, emphasised through height and setback strategies and defined through articulation that supports the transition of precinct granularity. It also notes that a central communal open space is established through the site to enhance the social dynamic and access to amenity, including natural ventilation and light to the apartments. The east and west frontages receive solar access during the morning and afternoon, whilst maximising views to the green open space.

The site adjoins the recently completed Yarrabee Katoomba development, comprising 24 duplexes that were completed last year and sold through McGrath Projects.

The relatively new Housing Delivery Authority pathway established by the NSW Government allows developers to submit State Significant Development Applications through a fast-tracked state process, effectively reducing reliance on local council approval pathways and aiming to accelerate housing delivery across New South Wales.

First look: Nearly 300 apartments pitched on former Katoomba golf course site

In Melbourne’s established inner east, the qualities that define a traditional house, width, height, and access to open ground, are increasingly difficult to replicate in new residential developments. Larger landholdings are scarce, and with them, the ability to create apartments that extend beyond compact, internalised layouts.&nbsp;

In <a href="https://www.apartments.com.au/developments/kew-vic-3101">Kew</a>, where the residential fabric is shaped by generous setbacks and mature tree canopies, that tension is especially visible.

<a href="https://www.apartments.com.au/developers/ricdanic-investments-pty-ltd">Ricdanic</a>&nbsp;is bringing forward a boutique collection of just 13 residences across two buildings at 9–11 Wimba Avenue, Kew. Comprising six homes at No.9 and seven at No.11, the project sits on a quiet, tree-lined street just off Cotham Road.&nbsp;

Each apartment has been planned with a level of independence more commonly associated with standalone dwellings, balancing privacy with the efficiencies of apartment living.

Architect Chris Idle, who has been practising for over two decades, says projects like this don’t come along often.

“There are very few opportunities to do these kinds of developments in leafy, established suburbs,” he explains. “To get this level of amenity, natural light, and architectural freedom in such a setting is extremely rare.”

[smartcode_project:default project_id=140755 project_image_fid=366267]

The internal planning begins with width. Living areas extend beyond five metres, allowing furniture, circulation, and glazing to sit comfortably within the same zone without compression. Ceiling heights shift from three metres through to five metres in select areas, changing the sense of scale as you move through the apartment. These proportions are paired with double-glazed windows and fully electric systems, balancing volume with performance, supported by a 7.2 NatHERS energy rating.&nbsp;

From the main living space, the apartments open directly outward. Large sliding doors connect to private gardens averaging 125 square metres, with some residences also incorporating balconies of around 60 square metres. Rather than acting as secondary outdoor zones, these areas sit flush with the internal floor level, extending the usable footprint of the home and allowing for multiple modes of use, whether for quiet daily routines or larger gatherings.&nbsp;

The landscape, led by <a href="https://www.apartments.com.au/landscape-architect/john-patrick-landscape-architects">John Patrick</a>, reinforces this relationship. Across the site, 23 different plant species have been introduced, including a mix of native and established varieties, arranged to maintain privacy while preserving sightlines and light access. Gardens are not treated as decorative buffers but as functional extensions of the apartments, shaped to accommodate movement, seating, and informal use over time.&nbsp;

[smartcode_project:default project_id=140755 project_image_fid=366265]

Architecturally, the project draws from Kew’s historic residential language. Handmade bricks by Krause define the exterior, grounding the buildings within the material palette of the suburb, while interior finishes, stone, timber flooring, and restrained detailing, continue this approach internally. Architect Chris Idle describes the intent as long-term rather than stylistic: “We wanted it to feel timeless.”&nbsp;

This emphasis on durability extends to how the buildings are accessed and secured. Entry is managed through keyless systems, with a double-gated basement incorporating number plate recognition for vehicle access. Each residence is paired with a private lock-up garage accommodating two to three cars, alongside storage, while all entry points are monitored continuously. These measures sit alongside EV readiness and fully electric infrastructure, aligning the project’s operational systems with its long-term design outlook.&nbsp;

The setting remains central to how the development is experienced. Located within walking distance of Kew Junction and close to established schools including Carey Grammar and Xavier College, the address benefits from existing infrastructure while maintaining a residential quietness that is increasingly difficult to find at this scale.&nbsp;

Construction is being delivered by <a href="https://www.apartments.com.au/builders/sinjen">Sinjen</a>, with a 10-year structural guarantee, with completion targeted for mid-2027.

[smartcode_project_cta:default project_id=140755]

Inside Wimba Ave, Kew’s garden-scale residences designed for space and permanence

High-end Sydney developer&nbsp;<a href="https://www.apartments.com.au/developers/abadeen-group">Abadeen</a> has secured approval for one of its latest Mosman projects, one of the first developments approved by Mosman Council under the NSW Government’s Low and Mid-Rise Housing Policy.

The approval represents an important step in delivering well-considered housing next to established village locations on Sydney’s Lower North Shore, in line with the intent of the Low and Mid-Rise zoning framework. 
&nbsp; 
There are currently 13 other sites lodged within Mosman Council under the policy, with <a href="https://www.apartments.com.au/new-apartments/27-29-heydon-street-mosman-nsw-2088">Heydon Street</a> among the first to receive development consent. 
&nbsp; 
Abadeen Founder and Executive Chairman Justin Brown said the project reflects a considered and appropriate response to its planning context. 
&nbsp; 
“This approval demonstrates how carefully considered, design-led development can align with the objectives of the Low and Mid-Rise Housing Policy," Brown said.

"The scheme has been designed to respond sensitively to its village setting, with a built form, scale and level of amenity appropriate to its local context. The determination reflects a balanced and considered planning outcome, with Council recognising the capacity for this site to accommodate additional housing within a well-located and established precinct.”

<img alt="Abadeen secures first approval under low and mid-rise housing policy for Heydon Street, Mosman" data-entity-type="file" data-entity-uuid="92811ce3-02e8-44fc-996e-c61ae039bd3e" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Heydon%20Street%20Aerial.jpg?VersionId=ZHJVuWQT64QcdrFJx963pFWFzTX7lI2I" />

The Heydon Street approval followed extensive consultation with Mosman Council, with Abadeen working closely with Council throughout the assessment process.

The approved scheme comprises 27 residences, with only four per floor, creating a low-density living environment. The building will include four half-floor penthouses designed to capture views across Middle Harbour, Sydney Harbour and the surrounding district.&nbsp;

The project is expected to appeal to downsizers and owner-occupiers seeking house-like proportions, privacy and local convenience. There will be north-facing Middle Harbour views from the second level upward. It is also just a flat 100-metre walk to Bridgepoint Shopping Centre, which will appeal to owner-occupiers and in particular downsizers.

Two-bedroom residences are expected to be priced from $1.99 million when sales launch later this year. 
&nbsp; 
Joe Tack, CEO at Abadeen, said the outcome reflects both the quality of the site and the broader need for well-located housing. 
&nbsp; 
“This is a highly considered site within a highly established local setting, offering elevated views and strong connectivity. The project has been designed to respond to that context, delivering a scale and quality of housing aligned with both the planning framework and evolving market demand.” 
&nbsp; 
“This approval is particularly significant in the context of Mosman, where new housing supply has historically been limited. While it represents the first approval of this scale in Mosman to be achieved in over 50 years, it is importantly located within a well-established residential location, in close proximity to the established commercial amenity of Spit Road and Mosman Village. It reflects strong confidence in Abadeen’s approach to design, delivery and community integration, while contributing to the delivery of much-needed housing in a highly constrained market.”

Abadeen has an established track record across Sydney’s Lower North Shore, with recent completions including KOYO in Crows Nest and ENSO in Neutral Bay.

In Mosman, Abadeen recently completed The Hampden, with Mosman Residences on the corner of Spit Road and Clifford Street scheduled for completion later this year. Construction has also commenced at Burran Residences, comprising three full-floor ultra-premium homes positioned just 50 metres from Balmoral Beach, with residences expected to achieve prices in excess of $20 million. Two further projects are also progressing through planning within the local government area.

Abadeen secures first approval under low and mid-rise housing policy for Heydon Street, Mosman apartment development

Apartment developer <a href="https://www.apartments.com.au/developers/martello">Martello™</a> is one of the latest entrants to the Gold Coast development market, with its debut project set to be one of the most boutique offerings on Chevron Island in recent years.

Martello has unveiled <a href="https://www.apartments.com.au/new-apartments/aere-chevron-island-18-20-mawarra-street-chevron-island-qld-4217">Aere Chevron Island</a>, a collection of 33 large-scale two-, three-, and four-bedroom apartments across an 18-storey building on Mawarra Street.

[smartcode_project:default project_id=143932 project_image_fid=367517]

The developer has placed a strong emphasis on wellness, briefing architecture firm Raunik Design to embed this philosophy into the project. It is a direction <a href="https://www.apartments.com.au/developers/martello">Martello™</a> plans to carry through its future developments along the coast.

<a href="https://www.apartments.com.au/developers/martello">Martello™</a> has positioned Aere as a continuation of its human-centric development approach, with a focus extending beyond amenity to the fundamentals of layout, natural light, and spatial planning. Promax Construction has already been appointed to deliver the project, with construction expected to commence in the coming months as part of the group’s broader expansion into South East Queensland.

Rising above the low-rise fabric of Chevron Island, Aere’s design emphasises generous internal proportions and uninterrupted outlooks, with residences oriented to capture coastal, skyline, and waterway views. Interiors prioritise open-plan living, with large-format glazing and carefully considered transitions between indoor and outdoor spaces.

[smartcode_project:default project_id=143932 project_image_fid=367508]

The upper levels are dedicated to larger-format homes, including four-bedroom residences designed as half-floor offerings. These layouts prioritise separation between living and sleeping zones, along with increased privacy and storage, features more commonly associated with detached housing than traditional apartment product.

Aere’s private resident amenity spaces centre on wellness. A rooftop level will incorporate a heated swimming pool, sauna and spa, alongside a residents’ lounge, dining areas and barbecue spaces, while additional shared facilities throughout the building include a gym and yoga area.

The inclusion of both social and quieter retreat spaces reflects a broader shift in higher-end apartment design on the Gold Coast, where developers are increasingly responding to owner-occupier demand for buildings that support long-term living rather than short-stay use.

[smartcode_project:default project_id=143932 project_image_fid=367814]

Aere is positioned within walking distance of Chevron Island’s village centre along Thomas Drive, as well as the HOTA cultural precinct via the Green Bridge, connecting residents to parklands, galleries, and event spaces.

For <a href="https://www.apartments.com.au/developers/martello">Martello™</a>, Aere represents the first in a series of planned Gold Coast developments, with the group also exploring opportunities in other coastal precincts, including Kirra and Palm Beach.

The move north comes as sustained population growth and infrastructure investment continue to reshape South East Queensland, with developers increasingly targeting boutique, design-led projects in established lifestyle pockets. Aere’s relatively small scale and emphasis on spatial quality position it within this emerging segment of the market.

[smartcode_project_cta:default project_id=143932]

Martello™ enters Gold Coast market with wellness-led Chevron Island development Aere

Asian Markets

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EXPERT OBSERVER
It all feels a little 'contagious'. Among emerging markets, that is. For a while, one could point to specific challenges in specific economies. But in recent weeks, the sell-off has spread, and not always with good justification. Indonesia is a case in point: fundamentals look sound - certainly no less so than, say, a couple of years ago - yet the currency has slid to a 20-year low.
Contagions come in different guises: economic, financial, psychological -- though in reality, they combine elements of all three. Even if more insulated than others, emerging Asia is still exposed on all these fronts. The best prophylactic is usually swift tightening, both monetary and financial. If the current turmoil lingers, the region will have to deliver more of it. And that'll dent growth.
Your economist has been making the rounds of late, in Asia and Europe, gauging investor sentiment. It's been a rough summer for many, no doubt. But one hardly registers a sense of panic. Views remain differentiated, and Asia on the whole is still seen as relatively robust.
The headlines, though, remain challenging. And as veteran emerging market investors well know, pressures can swiftly spread, exacerbated by markets that are thinner and less liquid than those in the developed world.
So it's worth revisiting, in principle, what can cause 'contagion'. Three dimensions matter - overlapping and reinforcing each other, of course, but nonetheless conceptually distinct.
Economic contagion occurs when real sector linkages between markets prompt stress to spread. Here, Asia is less exposed to potential turmoil in other emerging markets. But common themes are on investor minds nonetheless: a slowing China, foremost, would hurt emerging markets everywhere. Evidence of strengthening Mainland demand would thus do a lot to stabilize EM sentiment.
Broadly, trade tensions between the US and China are also frequently cited - both in terms of cooling Chinese demand, and in terms of the broader threat the dispute presents to global trade. Here, Asia is especially exposed, via supply chains that tie into China and the broader dependence on global trade.
Financial contagion refers to investor positioning. In the simplest case, should an EM investor face redemptions, but difficulties of getting out of positions in the most hard-pressed markets, he or she could be forced to liquidate positions elsewhere, including in economies with sound fundamentals.
For the moment, this doesn't appear to be the case. But the point is that emerging Asia could be affected by this even if the fundamentals of many economies in the region appear comparatively robust.
Psychological contagion is perhaps a little harder to define, but material nonetheless: a given market sells off even if there are no obvious economic or financial linkages to others. Apart from simply frayed nerves, this can be caused by a 'paradigm shift', where, say, investors suddenly question to wisdom of investing in emerging markets at all.
Contagion, of any form, is best prevented with swift and early action. In emerging markets, this usually entails tighter macroeconomic policy (and, if needed, structural reforms).
If the current market jitters persist, more may be needed across emerging Asia as well. Less so, of course, in countries with robust current account surpluses than in others. But even a strong balance of payments position, if the stock of non-resident liabilities is sufficiently large, doesn't obviate the need for some tightening.
Here's to the headlines turning a little more soothing soon.
Frederic Neumann is the Co-head of Asia Economics Research at HSBC
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j.ballantyne1990-6AQqhLzZaK

Why the contagion is spreading among emerging Asian markets: HSBC's Frederic Nuemann

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Savills office in Vietnam has merged with Alternaty, a leading hotel advisory in Indochina, as part of its efforts to tap into the growing hospitality markets of the Asia Pacific, particularly South East Asia. 
Alternaty’s employees will join the hotel business at Savills and will be based in Savills’ Ho Chi Minh City office. 
Savills Hotel Asia Pacific, led by Raymond Clement, consists of individuals with experience and a strong track record across the tourism and hospitality sector. Mauro Gasparotti and Rudolf Hever will both take the role of director, Hotels, Savills Asia Pacific, driving business in Vietnam and South East Asia. 
On the team from Alternaty, Savills Vietnam managing director Neil MacGregor said: “The Alternaty team, led by Mauro and Rudolf, are well known as market leaders in hospitality in the IndoChina region. Their capabilities will add depth to establish a robust platform, offering a complete suite of services for the hotel development lifecycle.”
The merger will help Savills get a platform to tap into IndoChina’s rapidly growing hospitality markets, with Vietnam itself seeing a 26% increase in foreign arrivals in 2016.  
With a growing number of investors actively seeking hotel and resort assets, this will consolidate Savills’ investment brokerage platform.
The Hotel Advisory Services in Vietnam will provide hotel and resort market research including feasibility studies, operator selection, asset management and investment brokerage.
“We are delighted to become part of the Savills family and to leverage Savills’ extensive operation, sales and marketing platform in the region,” said Mauro Gasparotti, executive director at Alternaty.
Rudolf Hever, director of Hotels, Savills Asia Pacific said more players were entering Vietnam’s growing market with total hotel transaction volumes at nearly $500 million in the last 24 months. The number of five-star hotel rooms in 2015 soared by 37% year-on-year to reach 24,000 units, he added. 
This growing trend in hotel development can be seen across hotel segments with an estimated 15%-20% growth in total hotel supply in the short term. Besides the key cities of HCMC and Hanoi, up and coming markets such as Phu Quoc, Danang and Nha Trang are also catching investor attention. 
Alternaty is a boutique real estate consultancy which was founded in 2012. It is known for its contacts and track record in commercial property, hotel and resort advisory throughout the IndoChina region. 
The Savills Hotels team valued and advised on US$9.1 billion worth of hotel assets in Asia Pacific in 2016. Most recently, it has led the sale of the Anantara Ubud Bali, the Duxton Hotel Saigon and the Hyatt Regency Osaka.
 
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jonathanchancellor-7SQnKwU6yx

Savills Vietnam merges with hotel advisory firm

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In a world racked by political uncertainty induced by Brexit negotiations, European elections and a new presidency in the US, the Asian markets appear to have maintained their appeal in 2016, according to Savills’ latest report.
"Office yields across all major cities hardened over the second half of last year and we believe there is still some (limited) scope for them to fall further in 1H/2017; the low interest rate environment, the ongoing ‘search for yield’ and increasing allocations to real estate are all considered to be positives for the sector," the report stated.
<a href="https://www.propertyobserver.com.au/images/2017/02/21/Screen%20Shot%202017-02-21%20at%205.21.11%20pm.jpg" target="_blank">Click to enlarge</a>
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One of the most significant challenges for investors is a lack of prime office stock, however, and volumes have fallen consistently compared with 2015, a situation which is unlikely to reverse any time soon.
This lack of liquidity across most asset classes has arguably been masked by the above average number of portfolio deals recorded over the second half.
Scarcity of assets has resulted in money accumulating on the sidelines, causing fundraising to decline versus the previous year.
<a href="https://www.propertyobserver.com.au/images/2017/02/21/Screen%20Shot%202017-02-21%20at%205.21.22%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/02/21/Screen%20Shot%202017-02-21%20at%205.21.22%20pm.jpg" alt="">
Despite its inward focus, Asian real estate capital has continued to explore overseas markets with the US attracting the lion’s share of deals, followed by the UK.
Cross border activity in 2016 was dominated by China, South Korea, Singapore and Hong Kong in that order while South Korean activity registered the highest rate of increase.
<a href="https://www.propertyobserver.com.au/images/2017/02/21/Screen%20Shot%202017-02-21%20at%205.21.37%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/02/21/Screen%20Shot%202017-02-21%20at%205.21.37%20pm.jpg" alt="">
It will be interesting to see how Asian capital reacts to rate hikes  by the Federal Reserve and a strengthening US dollar set against a less predictable policy landscape in 2017 if that  is what comes to pass.
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Asian commercial property markets continue to maintain their appeal despite uncertainty: Savills

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GUEST OBSERVER
Yep, it happened. And now that the dust is settling, the challenges for Asia are becoming more evident. In sum, 2017 looks like it’ll be the most difficult for the region since 2009. It’s not, of course, entirely the President-elect’s fault – his administration, after all, hasn’t even outlined a detailed policy agenda yet, let alone taken the reins of power. 
Plus, Asia’s travails are partly self-inflicted. Still, if the past few weeks are any indication, things are bound to get a lot tougher. Trade is one thing, with exports already struggling and little prospect for a policy-driven rebound. The bigger issue, though, is the dollar and rates. Financial conditions are tightening across the region, putting a squeeze on domestic demand. It’ll get bumpier, still. 
As impressive as the rebound from the Global Financial Crisis has been, Asia has over recent years merely limped along. The taper tantrum of 2013 was a wake-up call, but the region managed to hit the snooze button for a little while longer, avoiding outright financial stress. 
But growth continued to decelerate, with exports in particular struggling to make meaningful headways since late 2014 and debt saturation weighing on local demand. It’s tempting to think that the latest market gyrations will pass, too, without more substantial harm. But, with every iteration, prospects dim further. 
Start with exports. These, as noted, have struggled for some time now. A combination of factors is to blame, including weak capex the world over, the commodity investment slump, creeping protectionism (or at least the absence of major trade liberalization over the past decade), supply chain disintegration, and an expenditure shift towards services. 
The question for 2017 is whether exports will at last rebound. We have our doubts. An acceleration in US growth should help. Yet this may be offset by continued sluggish demand elsewhere in the world, not least in emerging markets. 
The Trump administration may also help spur a recovery in US private capex, via deregulation and other, purportedly more business friendly policies. Yet it will take time before the full impact is felt, leaving this to be, presumably, more of a story for 2018 and beyond. 
Key to watch will be a deal with Congress to repatriate offshore cash holding by US companies, but it’s not clear that this in itself will send capex soaring if record-low rates previously failed to do so. A promised 1 trillion US dollar infrastructure push could help as well, if this will ever be passed by Congress in its entirety. But again: this too, will stretch out over many years. 
At the same time, a Trump administration may adopt a more protectionist stance. True, details aren’t available yet, apart from some vague talk about punitive action and the promise to shelve the TPP. 
This, no doubt, will restrain exports, even if the impact will likely be more industry specific. But note that uncertainty over trade policy in itself will promptly weigh on growth in Asia by curtailing investment (why invest in further capacity if it remains unclear that the resulting goods can be sold?). In this sense, a pick-up in US capex would partly come at the expense of investment spending in Asia. 
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It’s hard to see, therefore, a meaningful revival in Asia trade for the foreseeable future. 
However, the bigger issues, at least in the near-term, are US rates and the dollar. The spike in US yields has certainly caught markets by surprise. And, if these revert in due course, the damage might prove limited. But accelerating US growth, fuelled by more generous fiscal spending, could make it easier for the Fed to hike rates. 
In fact, HSBC’s chief US economist Kevin Logan, now expects three Fed hikes over the coming year (up from two). 
This amounts to a stiff headwind for Asian economies that have come to rely on rapid credit growth to sustain demand in recent years. Even China, still partly protected by capital controls, is not immune to this: with the PBoC possibly needing to forego, at the very least, further aggressive easing in order to stabilize FX demand. Elsewhere, rate cuts are also becoming a more remote prospect, such as in Malaysia where policy room is shrinking even as growth sags. 
Currency moves are compounding the effect. While exchange rate depreciation should, in principle, provide a boost to Asian exporters, the resulting tightening in financial conditions (higher rates) could more than offset the loosening of monetary conditions (weaker exchange rates). 
First, growth is currently hugely credit intensive and debt levels high, amplifying the drag of higher rates. Second, for the reasons cited, US import demand, despite accelerating growth, will likely be insufficient to compensate for this. Third, contrary to previous episodes of exchange rate weakness, the current FX sell-off is broad-based and, notably, includes the renminbi, thus leaving few Asian exporters with a meaningful gain in competitiveness. 
Challenging stuff. But the effects are not necessarily uniform across Asia. Indonesia, the Philippines, and India are likely to be more shielded from the “Trump effect” given their low debt and low export exposures. 
By contrast, Malaysia, China, Korea, Taiwan, and Thailand should more affected. The winner, if one can call it that, is the Bank of Japan, with the weaker yen taking the pressure off. But that’s not much of a consolation: Japan, too, will in the end need exports to do a lot better to cure its growth malaise. 
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Frederic Neumann is co-head of Asian Economics Research, HSBC, and can be contacted <a href="https://www.hsbc.com.au" target="_blank">here</a>.
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