Following several years of poor results, real estate investors are focusing their attention on the developing world in 2014. Many people believe that some of Asia's conventional high flyers and most famous investment spots are overpriced, putting them in risky territory where the chance of a bubble bursting is high. used cars in qatar under 10 000
According to investment bank Macquarie, property prices are increasingly disconnecting from economic fundamentals in places like Hong Kong and Singapore, as well as in Australia's largest cities. This raises the possibility of bubbles forming, though the bank believes we have not yet reached that stage.
"We are worried that Singapore has one of the most overextended real estate markets in the world, and that it is only a matter of time before it corrects," the company says.
Macquarie claims Hong Kong is in a "classic bubble."
Both countries have imposed an additional 15% tax on foreign investors, denting the two city-states' reputations as free economies. Mortgages in Hong Kong, which "imports" U.S. rates through a currency indexed to the U.S. dollar, and Singapore, which manages its currency in comparison to a currency "basket" with a large U.S. dollar portion, are likely to become more costly as U.S. interest rates steadily begin to increase. Property prices in Hong Kong are expected to drop by 10% next year.
Many people blame Chinese buyers for raising prices across Asia. Property is seen as an excellent way to store wealth by Chinese people, as there are few other options for investing capital in China. So, after more than four years of restrictions at home, they're looking to expand their horizons - and store some money outside of China, although illegally, because Chinese people are only allowed to transfer $10,000 offshore per year in principle.
Their power, however, has spread far and wide, not only in the West but also in most Asian countries. One exception is Tokyo, which, after more than two decades of stagnation, is finally showing signs of life - though that could soon change.
According to Knight Frank's prime global cities index, the Japanese capital's prices have risen 13% in the last year, with the gains accelerating as the year progressed. While Japan's population has been declining since 2010, reducing the need for new housing stock other than for home improvements, there is hope that the Land of the Rising Sun will recover under Prime Minister Shinzo Abe's proposal to increase government asset purchases - at a time when the US is looking to cut its own program.
Winning the 2020 Olympics has already boosted apartment prices across Tokyo Bay, which are expected to increase by 20%, according to property firm Sanyu Appraisal Corp. The Olympic village will be located in Harumi, on reclaimed bay land just a few miles south of the city center. 84 percent of the venues would be within five miles of the village, with a drive time of less than 20 minutes.
Japan is one of the few Asian countries where property transactions, especially by foreign buyers, are not limited. While it is not an easy market to navigate, it, like its neighbor South Korea, allows foreign citizens full access to its property markets.
This indicates, according to Freya Beamish of Lombard Street Research, "that Japan is now benefiting from second-round effects of Asia's overheated property," she writes in a post. "Chinese individual investors tend to be dipping their toes in the water and eyeing Japan as a potential next destination, a wave that could be bolstered as China's capital controls are lifted."
Indonesia has been the year's standout performer and a pleasant surprise. According to Knight Frank's residential index, home prices in the capital, Jakarta, rose the most in the world last year, rising 27.2 percent. Rising middle-class wealth and a resource-fueled economy that is being increasingly fueled by domestic consumption rather than exports are driving up home values. Foreign buyers are not allowed to purchase houses, but temporary residents can lease those types of homes for up to 25 years.
Despite the fact that China has a sizable presence in Indonesia's business sector, the country's home-price increases are unlikely to continue, and prices were flat at year's end. The reason for this is that Indonesia's economy slowed in 2013 after three years of above-average growth. It's expected to grow at a still-healthy 5.5 percent next year, but that's still a slowdown that has resulted in dramatic revenue declines. Fearing that the market had become too hot, the central bank tightened lending limits, increasing the minimum downpayment to 40% for a second home and 50% for a third, up from 30%.
In 2013, the rupiah, Indonesia's currency, fell 11% against the US dollar, while the rupee, India's currency, fell 19%. Fears that money will drain out of emerging markets as the Fed "tapers" its quantitative easing, raising US rates and strengthening the dollar, hit both countries hard. That could happen if the Fed cuts rates again next year as predicted, and the central banks in Indonesia and India raise interest rates to attract foreign cash and investors - interest rates that would hurt property demand.
Other Southeast Asian markets have seen rises ranging from 2.5 percent in Bangkok, Thailand's capital, to 6% in Kuala Lumpur, Malaysia's largest city. According to Jones Lang LaSalle, Manila is in the middle of the pack with 3.4 percent annual growth but is seeing healthy sales activity and high demand from local investors. This points to a strong year for property in the Philippines' capital.
Prices in the former Portuguese colony of Macau continue to grow as a result of a casino boom that has seen it overtake Las Vegas as the world's gaming capital. According to the most recent figures available, prices in the only place in China that makes casino gambling increased by 10.5 percent year over year in October. However, as prices increase and as Hong Kong faces uncertainty, volumes have dried up, with the amount of residential transactions down 58 percent from 2012.