Wealthy Asian buyers will continue to be on the lookout for overseas residential properties next year, according to a Knight Frank report. Based on data this year, it is clear that mainstream markets in the Asia Pacific region have outperformed prime markets.
This is due to a number of push and pull factors, including the increased intervention of policymakers in some countries which has driven home buyers out of the prime markets.
“At the same time, given the favourable investment and lifestyle opportunities abroad, some prime buyers have been “pulled” towards prime residential markets outside of their domestic markets,” the report noted.
Macroeconomic factors remain one of the biggest concerns. A domestic slowdown is considered the largest threat to the performance of prime markets next year. Several residential markets will also be exposed to risks as governments continue to intervene in a bid to reduce house price inflation amid a low interest rate environment.
“If we take a slightly longer time horizon, given the huge increases in economic activity and wealth in the Asia Pacific region, the medium term forecast for prime residential property remains unanimously positive,” said Knight Frank.
Among the highlights this year is when Hong Kong introduced a 15 percent stamp duty for foreign home buyers in October in response to continued soaring prices in the city despite the many cooling measures introduced over the last three years.
This year, Singapore saw record home transaction volumes, driven by low interest rates amid a regulated environment. Further government intervention remains likely in 2013.
China also recorded strong demand, with prices in Beijing and Shanghai increasing by 12.82 percent in the past six months.
Romesh Navaratnarajah, Senior Editor of PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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