Tag Archives: Asia Property Market

Asian property prices expected to continue to rise despite govt measures

Posted on 3 Mar 2010 | Comments Off on Asian property prices expected to continue to rise despite govt measures

Recent measures to cool the property market in China, Hong Kong and Singapore are seen as the right moves to temper speculation and rapidly rising prices.

Still, industry watchers said that prices will have room to move upwards over the next two years.

This is because interest rates in Hong Kong continue to be low, and high-end property prices in Singapore are still below their peak.

Private home prices in Singapore rose by 24 per cent in the second half of last year, causing the government to step in.

Over in Hong Kong, the government also announced measures to avoid an asset bubble – after property prices rose by some 30 per cent last year.

The Chinese government is also doing its part to cool its red-hot property sector by tightening credit.

Analysts said these moves will limit price growth this year, but overall, they still expect prices to move upwards, even if at a slower pace.

Donald Han, managing director, Cushman & Wakefield, said: “With the introduction of these measures, and the fact that the government is keeping a lookout on the market, they may continue to intervene.

“We would expect the market currently to come down to between 8-15 per cent, depending on what market you are in in Asia Pacific. So it would probably come down by a few percentage points in terms of price increases.”

Analysts note that Singapore’s high-end residential market remains below 2008 peaks by some 20 per cent.

Meanwhile – they also say, the measures are only aimed at moderating the price increases.

Karamjit Singh, managing director, Credo Real Estate, said: “The measures that were announced by the Singapore government on February 19 do not address the root cause of the problem yet. The root cause of the problem is a short-term supply crunch at the lower end of the market, but it definitely helps mitigate the risk of bubbles being formed in the future.”

Experts said the factors set to drive prices higher this year are investors searching for higher yields, continuing hot money inflows and continuing low interest rates causing lower borrowing costs for buyers.

Source : Channel NewsAsia – 2 Mar 2010

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Property investment in Asia grows in Q3

Posted on 5 Nov 2009 | Comments Off on Property investment in Asia grows in Q3

Office market’s fall stabilises due to improvement in employment

The Asian real estate investment market continued to gain momentum in the recent third quarter, as capital values generally stabilised and sentiment improved.

Direct real estate investment in Asia jumped 25 per cent quarter-on-quarter to an estimated US$9.1 billion, according to a report by CB Richard Ellis (CBRE).

The property firm also said in a separate note that the Asian office market down-cycle stabilised in Q3 as a general improvement in the region’s employment markets provided clear indication that the office market was close to bottom.

‘Investors in Asia have become more optimistic over the past few months,’ said Andrew Ness, executive director of CBRE Research for Asia. ‘Cash-rich domestic buyers continue to underpin investment activity, while foreign investors are slowly emerging from a quiet first half-year to look for medium to long-term investments.’

However, several Asian governments – including those in Hong Kong, Singapore, China and South Korea – have voiced concern that real estate is rebounding too strongly and have taken steps to limit risks associated with potential over-investment, Mr Ness said.

‘The measures are likely to cool down the market but are expected to have only a limited effect on pricing,’ he said.

In Q3, Hong Kong accounted for 36 per cent of total investment sales, followed by China, Korea and Taiwan. In Singapore, the number of transactions above $15 million continued to edge up quarter-on-quarter, with volume exceeding US$900 million, or 10 per cent of the total volume in Asia.

However, overall transaction volume remained low in the first nine months of this year, falling 49 per cent year-on-year.

By sub-sectors, the Asian office market attracted US$4.7 billion of investment in Q3, or 52 per cent of the total flow of capital. Residential properties accounted for 16 per cent and the retail sector 13 per cent.

In a separate report, CBRE said that Asian office markets continued to improve in Q3 as rental falls slowed further.

The overall vacancy for Asian cities remained at 12.5 per cent – unchanged from the previous quarter. But Tokyo, Hong Kong, Beijing, Seoul and several South-east Asian cities all recorded a minor decline in the amount of space vacancy.

‘Corporations outside of the export trade sector commenced expanding headcount and financial institutions began hiring staff to pursue high-margin businesses as economic conditions improved,’ said CBRE. ‘Historically, office vacancy has trailed closely behind the unemployment rate.’

On the back of this, the CBRE Asia Office Rental Index shows office rents in Asia fell 3.1 per cent in Q3, decelerating from a 6.7 per cent decline in Q2. CBRE expects the rate of decline to ease further or bottom out in the coming months.

In Singapore, office rents fell for a fourth consecutive quarter in Q3 but the pace of decline eased. Continue reading →

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