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Asian Economic and Property Round-up
continued
Focus: Market and Prospects
48
to the World Trade Organisation (WTO), the demand
for prime office space, especially in Shanghai, is expected
to grow. Vacancy in Shanghai Puxi fell 7.3%
while rental rose an impressive 23.7%.
Most residential markets in Asia were also not spared
by the global economic slowdown. Capital values for
the luxury residential segment in Hong Kong Island
(1.2%), Makati CBD (7.5%), and Kuala Lumpur (2.6%)
fell. Nevertheless, there were some relatively bright
niches in the Asian residential markets. Prospect for
middle-income residential housing remain sound in
Philippines, especially around the major business
districts. In Bangkok, sale of landed houses increased
with strong end-user demand. Shanghai’s residential
market remained buoyant, supported by the sharp rise
in foreign investments coupled with favourable
property policies and promising economic outlook.
The sales market also remained strong, with the
average capital value rising by about 9%. In 2001, the
Sydney residential property market continued to defy
predictions of impending downturns. Demand has
been fuelled by interest rate cuts, an extension of the
First Home Owner’s Grant and a general under-supply
of stock.
The government also removed almost all of the
anti-speculation measures implemented in 1996
including capital gains tax for property sold within
three years of purchase. Foreigners are allowed to
take Singapore dollar loans for residential properties.
Asian Economic and Property Outlook 2002
Prospects for 2002 will depend largely on the timing
and magnitude of a recovery in the US economy.
Economists forecast that the US economy will recover
in the second half of 2002. Recent economic data in
the US suggests that the upturn is coming on more
powerfully at the start of 2002. The first quarter
growth in 2002 has been estimated at 4.2%, the
fastest in almost two years.
The Singapore office market reversed in 2001, after
a bumper year in 2000. Take-up fell to 1.12 million sf
in 2001 from 4.22 million sf in the previous year.
In Singapore, demand for private residential
properties, especially those in the mid- and low-end
segments, surged in the last quarter of 2001, in
response to price cuts, deferred payment schemes
offered by developers, and attractive mortgage rates.