Investment on Asia Property

Smart Finance

The Asian property sector started slowing down sometime in 2007 and remained weak in 2008 due to the slowdown in the global economy and the cautious state of investors after the crash of the United States housing market.

Money Wise

property chart

The meltdown resulted in the collapse of several large banking and financial institutions in the United States and Europe due to weakness originating from the mortgage and mortgage backed securities markets.

However in Asia, many were not too worried about the property market due to the regulated control of the banking system by their country National Bank and the well-established and matured property developers.

As a result of planned developments and sale of property, the Asian property market has remained healthy, despite the country’s Gross Domestic Product (GDP) contraction of 6.2 % in the first quarter of 2009.

As an indication of the strength of the property sector, the National Property Information Centre (NAPIC) recorded higher transaction volume of some 4.0% compared with a decline of 17.8 percent in 4th quarter of 2008.

property chart 2

In its study, NAPIC also recorded 79,149 transactions valued at USD 4.701 billion in 1H 2009 with the Residential property sub-sector being the most dominant. Total transaction volumes were 63.8% while total transaction value was 55.1%.

The development of residential property remained promising with upward trends in the completion and starts category but dwindling numbers in new building plan approvals.

Currently, by 1H 2009, the residential property sector recorded an existing supply of 4,230,328 units with and incoming supply of 544,926 units. Planned residential supply is recorded at 669,554 units.

property chart 3

In the demand scenario for the residential sales performances there were lesser units that were launched into the market in the past quarters. However, sales performances during the nine months were between 70% and 85% since the first quarter of 2007.

There were also signs that the Asian property market was affected by global economic and financial crisis but the market has remained healthy overall.

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