Central banks and regulators across Asia are moving to prevent property price rises spiraling out of control by due to growing fears of property bubbles forming.
The Singapore property and South Korea property sectors have already been affected by tighter borrowing rules over the past month, while media reports suggest that the India property market is set to follow suit. China and Hong Kong have also warned banks to avoid reckless lending to homebuyers.
“This is a positive, albeit tentative, sign that Asia has learnt from the experience of the west,” said Rob Subbaraman, chief Asia economist at Nomura. “It is prudent to lean against the formation of asset price bubbles.”
Property values in several countries in Asian, especially Hong Kong and Singapore, have appreciated dramatically in recent months, due to greater residential demand on the back of record low interest rates.
One of the greatest property price rises in Asia has been recorded in Singapore, where the average price of a home rose by 16% in the third quarter of this year compared to the preceding quarter. The Singapore government has now moved to pre-empt any speculative bubble from forming by abolishing two bank lending schemes that had allowed buyers to defer mortgage payments on uncompleted developments.
Source : homesoverseas – 7 Oct 2009
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