As we reported June 3rd, Global Property Guide's most recent survey of international house values pointed to a recovery in the worldwide real estate market
, with European countries performing well. But what about the markets further afield?
Asia-Pacific property has been cited by many as having performed strongly after the economic crisis and with rapid development and rising populations, house values have also been enjoying significant rises in the past year.
According to the Global Property Guide report, there are now fears of property bubbles forming
in Hong Kong, Singapore and Taiwan, which have experienced massive growth in house values of 27.15 per cent, 23.88 per cent and 18.46 per cent respectively on a year-on-year basis.
Sales Fall in China
Added to this, news that property sales in Chinese cities fell as much as 70 per cent during May sparked concerns that the number of real estate investment opportunities
in Asian destinations may not be so plentiful in the future.
However, property is only half the story in China, as the country boasts a robust and thriving economy. During the first four months of 2010, it posted growth of 11.9 per cent year-on-year.
Property Tax Reform
In an attempt to counter the problems being faced in the property sector - which some analysts have described as being worse than those faced by the US - the Chinese government has confirmed that it will be reviewing its property tax laws.
It could mean that annual levies are introduced to residential real estate in an attempt to curb the rising prices. According to a member of the central bank's monetary policy committee, the problems are worse than those of the US.
"It is more than a bubble problem," Li Daokui told the Financial Times. "When prices go up, many people, especially young people, become very anxious," he said. "It is a social problem."
Already this year, the government in China has implemented a number of measures to control the market
. Restricted home loans for third property purchases, banning state-owned businesses from investing in property and raising banks' minimum reserve requirements are a few of the new processes.
Current government measures are working hard in an attempt to control the property market in China and the country's strong economy is beneficial to the situation, but further rapid gains could eventually have a negative effect on the sector.
- Friday 04 June 2010