Recentmeasures to cool the property market in China, Hong Kong and Singaporeare seen as the right moves to temper speculation and rapidly risingprices.
Still, industry watchers said that prices will have room to move upwards over the next two years.
This is because interest rates in Hong Kong continue to be low, andhigh-end property prices in Singapore are still below their peak.
Private home prices in Singapore rose by 24 per cent in the second half of last year, causing the government to step in.
Over in Hong Kong, the government also announced measures to avoidan asset bubble – after property prices rose by some 30 per cent lastyear.
The Chinese government is also doing its part to cool its red-hot property sector by tightening credit.
Analysts said these moves will limit price growth this year, butoverall, they still expect prices to move upwards, even if at a slowerpace.
Donald Han, managing director, Cushman & Wakefield, said: “Withthe introduction of these measures, and the fact that the government iskeeping a lookout on the market, they may continue to intervene.
“We would expect the market currently to come down to between 8-15per cent, depending on what market you are in in Asia Pacific. So itwould probably come down by a few percentage points in terms of priceincreases.”
Analysts note that Singapore’s high-end residential market remains below 2008 peaks by some 20 per cent.
Meanwhile – they also say, the measures are only aimed at moderating the price increases.
Karamjit Singh, managing director, Credo Real Estate, said: “Themeasures that were announced by the Singapore government on February 19do not address the root cause of the problem yet. The root cause of theproblem is a short-term supply crunch at the lower end of the market,but it definitely helps mitigate the risk of bubbles being formed inthe future.”
Experts said the factors set to drive prices higher this year areinvestors searching for higher yields, continuing hot money inflows andcontinuing low interest rates causing lower borrowing costs for buyers.
Source : Channel NewsAsia – 2 Mar 2010
