Happiness This Way

Asia Property Investment low risk and performance

Asian residential property buyers beware!
real markets Asian goods appear, at first glance, to have recovered from the Asian crisis and to be back on their feet. In fact, the whole world has enjoyed a boom in residential real estate in the last decade – Europe, U.S., Australia and New Zealand have seen property prices soar.

But in Asia, the reality is very different. residential Asian markets perform poorly, according to a report by Global Property Guide. Once the figures for the increase of prices adjust for inflation, the Asian record is poor.

RESIDENTIAL PROPERTY AS OF THE ASIAN MARKETS HAVE DONE Since the peak (adjusted for inflation):
Hong Kong: still below 61% peak
Indonesia: still below the 50% peak
Malaysia: still 10% below peak
Philippines: still 55% below the maximum
Singapore: still 37% below the maximum
South Korea: still below 38% peak
Thailand: still 10% below 1992 peak

"There has been little investment less profitable than Asian residential property over the last decade," says Matthew Montagu-Pollock, publisher of Global Property Guide.

"And if the current construction boom continues across Asia, the next decade is not going to be fun for investors or property. "

Rental yields are quite high in Indonesia, Thailand and the Philippines while Asian countries benefit from strong economies. But the strengthening of its real estate markets has been limited, mainly by the government wrong steps.

"The real estate Asian markets have been stronger had it not been for the mistakes of government," says Prince Cruz, chief economist of Global Property Guide. "If there is a coup, a protest or runaway inflation, then interference government in housing markets that has caused the death of performance. "Cross study points to housing markets in Singapore, Hong Kong and South Korea as victims government subsidies and intervention, while the housing markets of the Philippines, Indonesia and Thailand have suffered from political instability.

the Asian prices still well below the maximum levels
Despite glowing reports of recovery, Asian house prices still are below their pre-Asian crisis levels. In a report released, Global Property Guide suggests that a combination of inflation, widespread subsidies of housing markets, political, and excess, the results have been very different from other Asian boom markets. Asia's present apparent property boom is a 'construction boom – not a real estate boom, "he says, warning investors against following the tempting siren songs of real estate professionals.

After adjusting for inflation, the picture changes dramatically glad the good news about increases price of properties.

Indonesia, for example, is having a difficult time fighting inflation. Corrected for inflation, prices in Indonesia home fell 8.4% in 2005 to 7% yoy during 2Q 2006.

This year's mild nominal price fall in Hong Kong (3.7%) is amplified when considering inflation. Hong Kong housing prices have fallen by 6% in real terms.

The (small) price rises seen in South Korea, Singapore and the Philippines generally arrive price drops, or are greatly moderated, once inflation is factored in.

About the Author

The Global Property Guide is a research publication and web site for the high net worth investor in residential property providing information about the process and benefits of buying property in any country in the entire world.

To access the report:

http://globalpropertyguide.com//articleread.php?article_id=85&cid=4

Masterpiece from To Aru Majutsu no Index by Mami Kawada (Opening #2)