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Asian property prices expected to continue to rise despite govt measures

Posted on 3 Mar 2010 | Comments Off

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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Tagged Asia Property, Asia Property Market, Asia Property Prices, Singapore Property, Singapore Property Market, Singapore Property Prices

JLL expects Asian business to drive growth

Posted on 11 Nov 2009 | Comments Off

Property services firm Jones Lang LaSalle (JLL) sees its Asian business driving growth next year as the region powers a global economic recovery, a top official said yesterday.

The company expects Asia to contribute almost a third of revenue in 2010, from a quarter in 2008, on the back of rising demand in China and India, and as key markets such as Hong Kong and Australia start to show recovery.

China and India – the world’s two most populous countries – have seen home and office sales reviving in major cities as prices fell as much as a fifth, and lower mortgage rates, after the global financial crisis last year cut off funding and demand.

‘It seems Asia is recovering more quickly than the US or Europe and actually will be one of the drivers of the world recovering,’ JLL’s chief financial officer, Lauralee Martin, told Reuters in an interview.

‘It’s growing on both revenue and profit basis. It could reach a third of our revenues as we get into next year,’ Ms Martin, who is on a short visit to Mumbai, said.

JLL is betting on more transactions as other Asian countries also see capital coming into the market, and believes that its strong position in the property management business gives it the competitive edge.

‘In the first nine months, we have grown our property management business by 30 per cent because we have been able to save clients a great deal of money from that service,’ Ms Martin said.

‘In a slowdown, reducing employees may not be the best thing, but reducing the cost of services is certainly a better option,’ she said.

Last month, the Chicago-based company, one of the world’s largest real estate services firms, reported that third-quarter income rose a third, but said that revenue fell 12 per cent to US$595 million as the global real estate downturn weighed.

‘The US market is not expected to get better until mid-2011. We could see a bottoming out by late 2010. But leasing and project development business will still feel pressure,’ Ms Martin said.

Source : Business Times – 10 Nov 2009