A visitor takes pictures of Singapore’s skyline shrouded by haze from the Marina Bay Sands Skypark observation deck. Singapore led the pack in Asia property market declines with house prices plunging by 5.02% year-on-year in the second quarter of 2014, after a drop of 1.68% in the first quarter of 2014 and 0.9% in the fourth quarter of 2013.

By Arno Maierbrugger/Gulf Times Correspondent/Bangkok

 

After a couple of strong years, real-estate markets in East and Southeast Asia are losing momentum, a new investment analysis by the Global Property Guide released on September 17 shows. At the same time, housing markets in the Middle East, Europe and the Pacific region have gained strength, the analysis says.

The study has been looking at ten core property markets in East and Southeast Asia and found that price performance has slowed down in eight of ten markets for which data was available, partly due to weaker macroeconomic performance of the respective countries, and partly due to government cooling measures.

According to the research, inflation-adjusted property prices have been falling in four countries in Asia. Singapore led the pack and saw house prices plunging by 5.02% year-on-year in the second quarter of 2014, after a drop of 1.68% in the first quarter of 2014 and 0.9% in the fourth quarter of 2013. Hong Kong’s residential property prices dropped 0.86% year-on-year in the second quarter of 2014 – in the same quarter of 2013 growth stood at 13.89%.

Both the governments of Singapore and Hong Kong have introduced “cooling measures” in the past to prevent their real estate markets from overheating.

In South Korea, house prices fell by 0.37% year-on-year in the second quarter of 2014, and in Vietnam, they fell a moderate 0.03% in the period. However, these two countries were the only ones in the region with a lower decline compared to the previous year’s period.

The Philippines, Thailand and Indonesia all showed deceleration in house price growth. Prime residential property in Makati just grew by 2.31% in the second quarter of 2014, compared to 8.6% during the same period last year. Indonesia’s residential property prices in the country’s 14 largest cities rose by just 0.74% in the period, down from 6.06% in the same period of 2013. Thailand’s prices were down to 2.28% growth compared to 3.76% in 2013.

Taiwan and Japan saw significant drops in house price appreciation as well.

The study also found that “China’s once booming property market is now on a verge of a slump”, with the price index of second-hand residential buildings in Beijing rising just 2.31% in the second quarter of 2014, a sharp slowdown from the robust growth of 11.11% over the same period last year. Housing sales in China fell by 9.2% in the first half of 2014 from the same period last year to $412bn, while new construction by area plunged by 16.4%, according to China’s National Bureau of Statistics.

The study concludes: “Many housing markets [in Asia] are now considered overvalued. Asian governments in particular are imposing cooling measures to avoid a repeat of the past. However, housing markets in much of the rest of the world are rising faster than before.”

Most of all in Dubai: The emirate remains the star performer of the survey for the sixth consecutive quarter, with house prices having risen 33.26% year-on-year in the second quarter of 2014. In Dubai, demand remains strong and construction activity continues to increase, the study concludes.

 

 

 

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