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Thailand – Confidence in condos
Confidence in condos
Tony Liaw
Thursday, June 13, 2013
http://www.thestandard.com.hk/news_detail.asp?we_cat=16&art_id=134530&sid=39804827&con_type=3&d_str=&fc=7
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Among southeast Asian nations, Thailand seems unable to attract a lot of foreign investors to its property market. And it’s probably due to some myths about Thai taxation, said Apichart Chutrakul, chief executive of property developer Sansiri.
Foreigners are technically prohibited from owing land in Thailand under their own names, he said.
“However, under the Condominium Act, 49 percent of the liveable square meterage of a condominium building can be owned by foreigners,” Apichart said.
“This enables people to purchase condominium units under their own name, without having to resort to registering a company in Thailand.”
And Sansiri, which specializes in selling condominiums, is eyeing overseas buyers.
“We have a solid marketing plan to increase the portion of foreign condo buyers from 3 percent to 10 percent within the next three to five years,” Apichart said.
In fact, Bangkok has seen its condo market grow rapidly over the past 25 years.
In 1998, the Thai capital had less than 10,000 units, currently there are more than 350,000 units, data by CB Richard Ellis show.
Prices have also gone up, rising to 23,225 (HK$5,822) baht per square foot from 3,250 baht psf 20 years ago.
Sansiri expects the stable demand for residential units to continue, particularly in the up-country market and holiday destinations such as Phuket, Pattaya and Chiang Mai.
“We expect a 14 percent increase in presales – from 42 billion baht in 2012 to 28 billion baht this year – as
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a result of the expansion of the mass transit system, growing consumer confidence and a rising pace of urbanization amidst a low interest rate environment,” Apichart said.
He added that the condo segment has long-term market potential.
At the same time, Thailand’s central bank is staying alert over the possibility of an asset bubble, warning that any breakdown would badly hamper the already slow recovery from the global financial crisis.
“We need to be cautious and monitor the situation very closely, and prepare measures to cope with any possible problem,” Songtham Pinto, director of the Bank of Thailand’s macroeconomy division, told a property seminar recently.
But developers are taking a different view as large firms have dominated Thailand’s housing market and are capable of responding to risks in a timely manner.
The sector also warned that wrong measures – usually targeting short-term speculators – could greatly affect buyers.
As one of the largest developers, Sansiri is kicking off a roadshow for its latest project this weekend.
It is offering 206 residential units, with sizes of 640 to 2,830 sq ft, at its beachfront condo project Baan Mai Khao, Phuket. Prices range between HK$1.75 million and HK$13.25 million. The roadshow runs on Saturday and Sunday in Hong Kong, and July 6 and 7 in Singapore.
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Asian Property Markets Starts To Cool
Asian Property Markets Starts To Cool
News Posted On: 13 June 2013
http://www.property-abroad.com/thailand/news-story/asian-property-markets-starts-to-cool-19317724/
Asia has seen it’s housing markets continuing to accelerate ahead of the becalmed European scene, but the rate of that acceleration has slowed as cooling measures take effect. Global research and real estate consulting firm CB Richard Ellis released a report showing that among 13 of Asia’s major cities, nine saw only modest price rises of between 0.7% and 3%.
Price growth was led by New Delhi and Mumbai, which saw gains of between 2% and 4% quarter on quarter, an effect attributed to tightening supply, while other strong performers included Manila in the Phillipines and Kuala Lumpur. Mild price growth was recorded in Beijing, Shanghai, Guangzhou and Shenzen.
In Bangkok, prices fell by 0.5% but this follows several quarters of steady increases and CBRE points out that the statistical impression of the market was distorted by a number of specific transactions. Outside of these, many projects in Bangkok are still seeing rising prices, again attributable to short supply.
Sales volumes, however, are declining across the region. Transaction numbers fell in Beijing, Shanghai, Guangzhou and Shenzen, and CBRE attributes these results to measures introduced by the Chinese government to cool the markets in these cities. Hong Kong and Singapore have introduced measures to cool their own markets, primarily in the form of increased stamp duty, and sales volume has slowed here too.
CBRE says concerns remain about the high cost of residential property in many markets. While the demand from end users and long term investors is expected to remain firm, cooling measures introduced in many of Asia’s markets have already begun to dampen buyer demand.
‘Overall house prices are set to hold steady or ease slightly over the next few quarters. The risk of rising inflation means authorities are likely to keep cooling policies in place or to introduce additional controls should prices continue to surge,’ CBRE states in its report. The company further expects that, as a result of regulatory cooling measures, ‘buyers will take longer to negotiate and conclude deals and are likely to become more selective in terms of the assets they acquire.’
This more cautious outlook from buyers has had some local benefits to the rental market. The CBRE Luxury Residential Rental index increased by 0.2% quarter-on-quarter in the first three months of 2013, compared to a 0.7% decline in the fourth quarter of 2012. Rents increased by between 0.5% and 1.8% in Beijing, Shenzen, Bangkok and Kuala Lumpur but were flat in Singapore and New Delhi.
The luxury residential market is expected to be subdued for some time in the region, according to CBRE. ‘Multinationals remain cost sensitive and weaker demand from expats will put downward pressure on rents over the remainder of the year despite the fact that there may be an uptick in demand from potential buyers priced out of the sales market,’ the company’s report explains.
It seems that the measures enacted to cool markets are having the opposite effects from those intended in some cases. In Hong Kong, concerns over the housing market originate with the plight of Hong Kong citizens unable to afford housing; yet cooling measures have coincided with rises in prices and little effect on rents. While the liquidity of the market is reduced, access to it, particularly for those on lower incomes, does not appear to have improved.
Written by Les Calvert Overeas Property Specialist
Hong Kong – Home prices to fall further, agents say
Home prices to fall further, agents say
Yvonne Liuyvonne.liu@scmp.com
Estate agents believe home prices in Hong Kong could drop a further 5 per cent in the second half of the year, bringing the total decline for 2013 to around 10 per cent.
“Prices have already dropped by 4.5 per cent from the market peak in February due to the introduction of new stamp duties,” said Midland Realty chief analyst Buggle Lau Ka-fai. “They could fall 5 to 10 per cent for the whole year.”
Sales are tracking prices downwards, and Midland has also revised its forecast on transaction volumes. Executive director Vincent Chan now believes some 53,000 flats will be sold in the secondary market this year, down from a previous forecast of 58,000 to the lowest level since 2003 when the outbreak of severe acute respiratory syndrome (Sars) triggered a collapse in flat sales and prices.
Weekly sales in the 35 housing estates monitored by the agency were up more than 20 per cent to 105 deals last week from a week earlier. But that is less than half the average weekly sales of 200 to 250 deals before the cooling measures were introduced.
In the new home market only 197 flats were sold from the introduction of the Residential Properties (First-hand Sales) Ordinance on April 29 to the end of May.
“Capital may leave Hong Kong following the improvement of the US economy,” Chan said. “With the impact of the cooling measures in the Hong Kong property market, property prices may drop dramatically. The government should prepare a plan to withdraw the measures.”
Centaline Property Agency founder Shih Wing-ching said property prices will continue to drop due to uncertainties over both the political and economic environments. “It will be difficult to solve the current political disputes and interest rates may rise. These factors will lead to a further fall in property prices,” he said.
Centaline managing director Louis Chan Wing-kit said that in the short term, though luxury flat prices could drop by up to 15 per cent, prices of second-hand homes valued at less than HK$5 million could rise by 10 per cent in the second half.
“The 5,000 ‘white-form applicants’ [who are eligible to buy second-hand Home Ownership Scheme flats without paying a land premium] will boost the sales of small flats. Also, under the cooling measures, first-time buyers are not affected by the new stamp duties and most of them would buy small flats,” he said.
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Malaysia – Iskandar follows the Shenzhen script
Iskandar follows the Shenzhen script
http://www.scmp.com/business/money/markets-investing/article/1257278/iskandar-follows-shenzhen-script
Links to Hong Kong are replicated in the Malaysian economic zone’s ties to Singapore
Efforts to transform the Malaysian border zone near Singapore into a bustling commercial corridor appear to be on track after a rocky start.
The zone, known as Iskandar, is emerging as an attractive opportunity that deserves to be on the radar of those considering investment in the new growth centres of Asia.
Iskandar is a 2,216 square kilometre urbanisation project, three times the size of Singapore. Nusajaya, the residential zone at its core, which stares across the water at the Singapore skyline, is just a 45-minute drive from Singapore’s Changi airport. The zone is geared towards a residential metropolis with educational, medical and theme-park infrastructures being used to attract resident migrants from Singapore. Logistics, transport and industrial-related infrastructure is being developed in adjacent zones.
One reason that Iskandar makes investment sense is that it complements Singapore’s new economic strategy. The city state’s sharp rise in housing prices and schooling costs is creating a natural pool of demand for low-cost living within commuting distance. This pool also includes the growing ranks of Singaporean pensioners struggling to survive in a low-yield and high-inflation environment. Iskandar’s new industrial parks offer the lure of cheap labour, good logistics and infrastructure. For Malaysia, it offers the possibility of regenerating the neighbouring border city of Johor Bahru, improving cross-border connectivity and bringing in cross-border investment in a golden era of Malaysian-Singaporean relations.
Malaysian planners borrowed heavily from China’s experience in fostering rapid industrialisation of the Pearl River Delta economic zone. Authorities in Kuala Lumpur identified the Johor border zone in 2006 as one of Malaysia’s five special economic corridors, reminiscent of the way Shenzhen was singled out as one of China’s five special economic zones in 1979.
However, it has only been since 2011, when Singapore’s sovereign fund Temasek announced a 30 billion Malaysian ringgit (HK$6.33 billion) joint investment with its Malaysian counterpart Khazanah that overseas investors started taking Iskandar seriously.
For overseas investors, the key attraction of Nusajaya’s residential real estate is low prices. Malaysia remains the only market in Asia outside Hong Kong and Singapore to allow foreigners to own freehold property without restrictions. Consider also that Singaporean property prices have risen by close to 50 per cent during the past five years and have been the target of numerous government measures to restrain further price appreciation. Keep in mind that average property prices in Singapore are 3.7 times more expensive than Nusajaya’s. Much like Shenzhen over a decade ago, it is this cross-border price arbitrage that will continue to fuel strong home-price appreciation in Iskandar. Indeed, with prices already at 750 Malaysian ringgit per square foot, Iskandar property is comparable with prices in the capital Kuala Lumpur. That said, cross-border connectivity plans are likely to be a catalyst for future gains in land prices.
Currently, there is one coastal highway connecting Singapore to Nusajaya across the Johor strait at two gateways: the Causeway and the Second Link. A new ferry link between Singapore and Puteri Harbour, Nusajaya, began service in May. Future plans include an MRT link to Singapore’s MRT system and a high-speed rail service from Kuala Lumpur to Johor Bahru which will connect to central Singapore.
Iskandar’s success in attracting big-brand investors, especially from Britain, has been surprising and possibly reflects strong government involvement. The Legoland theme park, which opened in September last year, attracted 1 million visitors in just four months. It has since had to introduce admission caps to cope with the flood of daily visitors. The Hello Kitty Town park opened one month later has also enjoyed strong visitor growth.
More surprising has been the success of Educity, a campus of schools and colleges which has filled up so fast that authorities have decided to develop an adjacent Education Park. Southampton University and Newcastle University have both opened faculties and currently have several hundred students enrolled
Britain’s Marlborough College has also established an integrated primary and secondary boarding school in Educity. About 370 students, many commuting daily from Singapore, are currently enrolled. Other high-profile brands soon to open include Singapore’s highly-regarded Gleneagles Hospital, which will open a 300-bed medical centre by next year.
The “build it and they will come” model of investment has yielded impressive results both in Singapore and in markets such as Macau. The synergies between Iskandar and Singapore, including joint government financial commitment to ensure its success, add up to a good long-term investment for those looking to relive the heyday and investment returns of Hong Kong’s economic integration with Shenzhen.
Carl Berrisford is an analyst for UBS CIO Wealth Management
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Hong Kong – Fall in Hong Kong property prices may be good for the economy
Fall in Hong Kong property prices may be good for the economy
Donna Kwok says a feared drop in Hong Kong property prices may actually be good for businesses and households struggling with rising costs, and an economy seeking stability
Unfortunately not. Because property is an important pillar of Hong Kong’s economy, no family or business is immune from the impact of a substantial property price drop. But there is a case to be made that, if it happened, it could be for the better.
Here’s why. To start with, a fall in property prices means a significant easing of the costs of running small and medium-sized businesses, a lower cost of living for households and less so-called systemic risk for the banking system. Most important, it could mean less inflation all round and a more balanced economy.
Two studies this year and a couple of key numbers tell us much about this. Hong Kong is the world’s 14th most expensive city to live in, according to the Economist Intelligence Unit, and the most expensive in which to locate a business, according to real estate adviser Savills. Residential prices are more than double what they were in December 2008 and 18 per cent higher than their peak at the onset of the Asian financial crisis in October 1997.
Moreover, rent accounts for the bulk of costs for most local businesses (easily half or more in popular districts such as Causeway Bay) and one-third of the average household budget. Should economic growth stumble in response to either a faltering US or China (even worse, both), then lower rents would be very welcome.
The negative side to a property price drop would be the drag it places on economic growth. Hong Kong’s property sector accounts for 18 per cent of gross domestic product and 7 per cent of jobs, although we estimate it has contributed up to 40 per cent of economic momentum since 2008.
Moreover, because listed property and construction companies have a disproportionate influence on the Hang Seng index, property price changes usually sway equity market performance too. This means ups and downs on the stock market can sometimes amplify the so-called wealth effect that property price changes have on people’s spending. Seven out of every 10 Hong Kong households in private flats are homeowners, many of whom probably own equities, too. Using data since 2000, we estimate that a residential property price fall of, say, 10 per cent would trim our 2013 and 2014 GDP forecasts to around 3.4 per cent and 4 per cent year-on-year, respectively (from our current forecast of 3.7 per cent and 4.4 per cent). If, however, negative property market sentiment spills over to equity markets and pulls down the Hang Seng index by a similar 10 per cent, our current GDP forecasts could be depressed further, to 3 per cent this year and 3.5 per cent in 2014.
Historically, Hong Kong’s equity and property price indices tend to move in lockstep; they rarely diverge. However, two unprecedented factors prevailing at present have made it more likely than during previous property downturns that share prices could hold up even as property prices fall.
First, international capital markets are currently awash with an extraordinary and unprecedented amount of global liquidity (essentially, money looking for investment opportunities), most of it concentrated in Asia. This should offer additional support to equities compared with previous property downturns.
Second, the softening of the property market is the result of measures specifi-cally aimed at that sector, with a view to stabilising the wider financial system (what economists call “macro prudential” measures).
In other words, we are not witnessing so-called macro events that can affect both property and equities, such as the Asian financial crisis, the bursting of the tech bubble, the severe acute respiratory syndrome outbreak or the global financial crisis. Since it is constitutionally illegal for capital controls to be introduced in Hong Kong, the government’s only option is to apply macro prudential measures, such as on the property market or on bank lending.
Besides, investors have become more focused on searching for yield via more efficient asset allocations. This means that, in the event of a significant property price fall, we might expect more funds to shift from Hong Kong’s property sector into local equities, with a positive spillover effect into private consumption.
Expect the markets to continue brooding over the possibility of a fall in property prices in the coming weeks and months. But it’s worth remembering that we’ve been here before. At the start of 2012, we heard much the same thing, but prices ended the year 20 per cent higher. As such, even if prices were to end this year 20 per cent lower, it would only amount to the start of a correction, not a catastrophic collapse – for investors or the economy.
And we could even get a more stable economy out of it in the longer term.
Donna Kwok is HSBC’s Greater China economist
http://www.scmp.com/comment/insight-opinion/article/1257185/fall-hong-kong-property-prices-may-be-good-economy
Philippine – office rent market hottest in Asia
PH office rent market hottest in Asia
By Roger M. Garcia | Posted on Jun. 08, 2013 at 12:02am | 496 views
In a press briefing, prominent commercial real estate services firm, CB Richard Ellis (CBRE) Philippines disclosed that the country’s office market is growing at record levels with occupancy rates hitting 97 percent across Central Business Districts (CBDs) in the first quarter of 2013 “as it shows no signs of slowing down”.
CBRE vice chairman and global corporate services chief Joey Radovan said that “Makati City remains the country’s top CBD as it offers the highest quality Grade A and premium office buildings available in the market”.
Makati largely gained from the expansion of multinational corporations, with the CBD’s vacancy rating down to 5.07 percent in the first quarter from 5.45 percent recorded in the previous quarter.
Radovan said vacancy rates in Bonifacio Global City (BGC), Ortigas, Alabang, and Quezon City fell below 5 percent in the first quarter, benefiting from the tightening of supply and increasing rates in Makati CBD.
Metro Manila is among the areas where rental growth is accelerating, alongside Bangkok, Taipei, Tokyo, according to industry data. Occupancy rate in Metro Manila has consistently been above 90% since 2011.
CBRE estimates office space take up for 2013 in Metro Manila is at 450,000 sqm and nationwide at 600,000 sqm.
CBRE CEO Rick Santos in the same briefing attributed high investor confidence that placed the Philippines office rental vacancy levels to hover at an all-time low of 3.21 percent in Metro Manila.
“Amid continuing credit upgrades, cost-effective rental rates, the influx of expanding multinationals and manufacturers, and expatriates moving from renting to buying properties, we see a very encouraging outlook for the Philippine property sector, Santos said.
Radovan further explained that the combination of the effect of anti-speculation taxes, tighter rules, and sky-high property costs in saturated markets such as China, Hong Kong and Singapore, more property investments are expected to boost Philippine developers”.
Emerging business districts in Metro Manila, such as Bonifacio Global City in Taguig, benefitted from the tightening of supply and increasing rates in Makati CBD.
The growth of BPO full-time employees (FTE) was highest in BGC, Muntinlupa and Quezon City. FTE growth in the Taguig, particularly in the BGC, grew by 13% in 2012. It surpassed Muntinlupa in 2010 and Mandaluyong in 2011.
When it comes to total FTEs, Makati still leads all cities at 86,757. Quezon City is close behind with 51,518 FTEs, a number largely boosted by BPO locators in Eastwood, UP-Ayala Technohub, Eton Centris and Eton Cyberpod Corinthian.
http://manilastandardtoday.com/2013/06/08/ph-office-rent-market-hottest-in-asia/
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Hong Kong Is Not Worried If Home Prices Will Drop 20%, TVB Says
Hong Kong Is Not Worried If Home Prices Will Drop 20%, TVB Says
By Stephanie Tong & Billy Chan – May 29, 2013 5:43 PM GMT+0800
A 20 percent decline in Hong Kong property prices won’t “worry” the government, TVB news reported yesterday, citing an unidentified government official.
Even if property prices fall 40 percent in the long run, the government is confident that there won’t be a large amount of negative-equity cases like in 1998 and 2003, the report said.
A shortage of housing, low mortgage costs and a buying spree by mainland Chinese have led home prices to more than double since the beginning of 2009, shrugging off repeated attempts by the government to curb gains amid an outcry over affordability. Chief Executive Leung Chun-ying, who took over in July as head of the government, on Feb. 22 imposed his toughest yet property curbs by doubling the stamp duty on all property transactions higher than HK$2 million ($257,609).
Hong Kong home prices have fallen 2.3 percent since the February measures, according to an index compiled by Centaline Property Agency Ltd. Mortgage lending has declined to a “trough,” He Guangbei, chief executive officer of BOC Hong Kong (Holdings) Ltd., the city’s largest home loan lender, told reporters yesterday.
“We do not comment on reports attributed to sources,” Leo Law, a spokesman for transport and housing bureau, said by telephone today.
Extended Decline
The official’s comments underscore that the government was unlikely to…
http://www.bloomberg.com/news/2013-05-29/hong-kong-is-not-worried-if-home-prices-will-drop-20-tvb-says.html
Hong Kong – Property curbs work their magic: Tsang
Property curbs work their magic: Tsang
Karen Chiu
Tuesday, May 28, 2013
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Financial Secretary John Tsang Chun-wah said government measures have been effective in reducing both home prices and transactions.
In a paper submitted to a Legislative Council panel yesterday, Tsang said flat prices dipped by 0.7 percent last month from March while the number of transactions plunged to 3,427 in April from a monthly average of 5,424 recorded during the first quarter of this year.
It was also much lower than the monthly average of 6,778 homes changing hand last year
The government imposed its latest curbs on February 23. Within a month flat prices had slipped 0.1 percent, the paper said.
This reverses “the exuberant situation in the first two months of 2013 when flat prices on average rose by….
Hong Kong – Predictions of a huge price fall have been wildly exaggerated
Predictions of a huge price fall have been wildly exaggerated
Despite the government’s cooling measures, Hong Kong flat prices have stabilised recently
Home prices might have fallen slightly as a result of government measures to cool down the property market three months ago, but will they go on to decline as dramatically as some analysts have predicted?
Not if latest price trends are an indication.
In late February the government doubled stamp duties levied on the sale of homes and non-residential properties valued at more than HK$2 million. The Hong Kong Monetary Authority also ordered banks to increase the amount of capital they hold against new residential mortgages, causing some banks to raise mortgage rates by 25 basis points.
The market immediately responded with a significant drop in transactions and ….
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Hong Kong – Developers switch strategy on sales
Big builders to focus on selling investment properties and mainland projects after new rules cause sharp fall in HK housing deals
Hong Kong’s big property developers are expected to speed up the sale of their investment properties and mainland projects in a bid to counter the impact of slackening demand for housing in the city, analysts say.
Sales of new homes plunged this month, with just 50 deals made in the wake of measures aimed at curbing demand and price growth in the market.
Read more: http://www.scmp.com/business/article/1246817/developers-switch-strategy-sales
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