Tightened mortgage lending and rising interest rates continued to impact on buyer demand in most Asian markets in the second quarter of 2011.

Buyer sentiment weakens amid further tightening measures

Concern over the regional economic outlook rose as the economic situation in the United States and Eurozone worsened in July, and further deterioration could have a knock on effect on the Asian economy.

Transaction volume remains generally stable

river condo Bangkok
Buyer sentiment is expected to continue to weaken in the face of further interest rate hikes

Trading volume in Shanghai and Hong Kong declined on a q-o-q basis in the second quarter whilst activity in Singapore remained steady.  Southeast Asian markets displayed mi xed results, with Ho Chi Minh City recording a significant fall in completed deals.

via CBRE Thailand Asia Luxury Residential MarketView Q2 2011.

Price appreciation begin to ease

The CBRE Asian Luxury Residential Capital Value Index rose by 2.5% q-o-q in the second quarter compared to a rise of 5.5% q-o-q recorded in the first quarter. In Hong Kong price appreciation moderated to 8.9% q-o-q from 14.0% in the first quarter, although the rate of growth nevertheless remained the fastest in the region. Capital value growth eased in the most first-tier cities in China following the implementation of further restrictions on home purchases. Prices in Bangkok and Ho Chi Minh were static as demand from end users was dampened by more stringent mortgage policies.

Prices to remain stable

Luxury home prices in Asia are expected to remain stable over the remainder of 2011 although some markets could witness a slight decline. Buyer sentiment is expected to continue to weaken in the face of further interest rate hikes and the tightening of credit, which will put greater downward pressure on home prices. Concern over the potential introduction of new tightening measures in  China, Singapore and Hong Kong may also restrain capital value growth.

 

About the author

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Sign Up for Our Newsletter

Get notified of our weekly selection of news

You May Also Like

Global Woes Cast Shadow over ASEAN+3 Growth

The continuing strict dynamic zero-COVID policy and real estate sector weakness in China and potential recessions in the United States and the euro area are weighing on the region’s outlook.

A short Guide to Taxation in Thailand

If the land or building is left empty or unused for a period of more than three consecutive years, it will be subject to an additional rate of 0.3% every three years, but the amount will not exceed 3%.

From Phuket with love: Russians escape war in Thailand

Thousands of Russians, hoping to avoid the threat of conscription and the economic devastation of war, have traveled to the kingdom, many of them seeking new homes.