Low interest rates and easy money are in danger of creating a new property bubble – in Asia.
Prices plunged in 2008. But markets are recovering surprisingly quickly. Private home prices in Singapore rose by 15.9% in the third quarter. Hong Kong housing has almost retraced all of last year’s 20-30% slump. In India, DLF, the country’s largest developer, claims it took just two hours to sell out a new 1,250-apartment development, even although prices were raised by 30%.
Before the bust, Asia didn’t see the manic levels of property investing that the US or Britain did. It’s a bit misleading to talk of Asian residential property as a single market, but broadly speaking, prices at the peak weren’t in bubble territory. Sure, there was speculation in some parts of most markets. But the crash didn’t leave huge sections of the population in negative equity. The worst hurt by the fall were developers in countries such as China and India, who built too much too quickly at too high a price. Continue reading
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