Grand Dreams in Property
The Trend
“Rich Asian individuals are snapping up luxury residential properties and even office towers in the West. But Asia’s biggest investors, including sovereign wealth funds, insurance funds and pension funds, are only just getting into the real estate game.
According to a new report released Wednesday by real estate firm CBRE, Asia’s institutional investors have just 1.7% of their assets in real estate, compared to as much as 8% by similar investors in Europe and North America.”
http://blogs.wsj.com/moneybeat/2013/07/31/asian-funds-set-to-snap-up-global-property/
Tokyo Cheap to Hong Kong Luring Asian Bargain Hunters: Mortgages
“Asian investors like Chang are being lured by returns as
high as 8 percent on rental income and signs the property market
is recovering. The government’s resolve to keep the yen weak has
also made real estate in Japan more affordable compared with
Hong Kong, Singapore and Taiwan, where governments have been struggling to contain surging residential prices.
Home prices in Tokyo are around 120,000 yen to 150,000 yen
per square foot, according to Chicago-based Jones Lang LaSalle.
That compares with about 280,000 yen to 400,000 yen in Hong Kong
and 200,000 yen to 250,000 yen in Singapore, it said.”
Source : Bloomberg
“House prices in London are continuing to outstrip those in other parts of the country, according to the latest Land Registry figures.”
http://www.bbc.co.uk/news/business-23467794
Crying Foul
I was hearing all sorts of claims and gossip on how property owners are buying small stakes into each other’s buildings to boost price levels and secure higher leverages. All hearsay of course.
““Three straight months of national home value appreciation above 10 percent is not normal, not sustainable and, frankly, not very believable.”
Any why not? After all, bricks and mortar is as safe a houses and will never go down. There was no crash in the US in 2007 to 2009, the Singapore property market in 2009 didn’t fall by 40% or so, the Asian market didn’t crash in 1997 (or was it that it didn’t crash in 1998, I will have to double check), Japan never crashed, the UK didn’t crash in the late 80’s or early 90’s, Spain never crashed. I can’t think of any property market in the world that has ever crashed, they only go up and even if they had done we all know that everyone knows that the Chinese are all very rich and will buy all the property in the world as China will keep growing at 14% a year and the Chinese middle classes are exploding and all the rest and the same goes for India and all the BRICS and the whole of Asia so it just can’t possibly go wrong and even if the BRICS are dead it won’t matter because we have Singaporeans and they are very rich and will keep snapping up property everywhere and won’t ever sell cos they are cash buyers and never borrow like those stupid lazy Westerners and so we have layer and layer of cushioning that will guarantee a one way market. So, yes, just as global yields are beginning to rise, why not?
Hey Mark,
From my personal experience, Asians (and Singaporeans) do need to sell sometimes otherwise I would not have been able to buy my house in 2004 for about half of what the previous chap bought it for in 1993 😉
You are probably right, demand > supply as long as the population grows and remain migratory.
Middle class explosions means more anger when it takes 40 years to pay off a house rather than 20 in the past, unless of course the property price doubles during that time.
For some cultures, the right to housing is a given. For others, it is a privilege.
https://tradehaven.me/2013/01/16/wealth-the-fallacy-of-singapore-property-written-for-my-friends/
https://tradehaven.me/2013/07/06/singapore-housing-and-the-2-million-sweet-spot/