Market Trends of Asia Pacific Architectural Services Industry
This section covers the major market trends shaping the APAC Architectural Services Market according to our research experts:
Residential Sector to Hold Significant Market Share
- The residential sector is among the largest end-user segments for architectural services. The residential project stakeholders use different forms of architectural visualization to serve distinct needs. These architectural services provide various help, including interior design, in the residential sector to ensure a successful residential construction project. The operating firms work with trusted partners, suppliers, and service providers to help users achieve their project goals.
- Rapid urbanization significantly boosts the Asia-Pacific region's residential architectural services market. In the Asia Pacific region, the urbanization rate is considerably higher in the East Asia and Pacific region, as about 61% of the population stays in urban areas. In South Asia, this number accounts for only 35%. (Source: World Bank). However, this rate is expected to increase with the growth of the industrial sector and will contribute significantly to the demand for housing, in turn, the studied market.
- Furthermore, the growing urban population is driving the government to take several initiatives to ensure the sufficient availability of residential spaces. For instance, the Indian government recently introduced the Affordable Rental Housing Scheme (AHRC) to provide migrant workers with affordable rental housing. This, combined with the Maharashtra Chief Minister's introduction of the Maha Awas Yojana, a new rural housing project, is projected to propel India's residential construction sector forward.
- Similarly, in Malaysia's 2021 budget, the government proposed several incentives to increase homeownership. For example, the Malaysian government declared that first-time property buyers in the country will be exempt from paying stamp duty until 2025. Several Malaysians who want to buy a home in the nation will profit from the stamp duty exemption.
- In November 2022, Thailand's Government Housing Bank (GHB) sought approval from the cabinet and Finance Ministry for the third phase of the "One Million Home" project, which aims to provide housing to low income-earners. Initiatives such as these are expected to create many opportunities for architectural services in the residential arena.
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China to Hold Significant Market Share
- China's urbanization rate is among the highest in the Asia-Pacific region. According to the National Bureau of Statistics (NBS) of China, the degree of urbanization in China has increased from 61.5% in 2018 to 64.72% in 2021. The country plans to take the urbanization rate beyond 65% by 2025.
- Rapid industrialization is among the significant factors driving the country's urban population count, as many workforces are required in industries. To support the urbanization growth, the government is taking several initiatives, such as investing in new residential and commercial spaces to ensure accommodation for inhabitants.
- For instance, according to the data from the American Institute of Architects (AIA) Shanghai reports, by 2025, China will have constructed the equivalent of 10 New York-sized cities since the 1990s. Furthermore, according to the NBS of China, in 2021, about 13.69 million units of apartments were sold by real estate developers in China.
- China remains a site for architectural experimentation and attracts multiple companies to provide architectural services. Although, in the past development of China's construction industry, architectural design only profoundly participated in the subsequent building construction process after submitting design drawings, showing a state of fragmentation between architectural design and building construction, which has brought a series of drawbacks. The shortcomings of the traditional production model have promoted the development of new business models, such as general engineering contracting and whole-process engineering consulting, which are supporting the growth of the studied market.
- Furthermore, China has registered rapid development of Leadership in Energy and Environmental Design (LEED) green buildings over the past few years, with first-tier cities remaining the most active players. As of April 2021, nearly 6,600 projects in China totaling more than 330 million square meters either received the Leadership in Energy and Environmental Design (LEED) certification or were working toward it, making it the second-largest market after the United States in terms of LEED certification, according to data by the US Green Building Council.
- China is also massively investing in the digital transformation of its cities and has developed smart city infrastructure that has already been applied to many of its major metropolises and their industries. Furthermore, China's state-led initiatives in technological innovation and public-private enterprise involvement are further expected to drive the demand for architectural services during the forecast period.
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