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Asian Property Prices Are Falling "as If There's A Global Financial Crisis"

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http://www.reuters.com/article/2014/08/28/uk-singapore-property-idUSKBN0GS2M120140828

There's an eerie silence at night in Sentosa Cove, the man-made island resort billed as Singapore's answer to Monte Carlo and the only place in the country where foreigners can buy landed property.

Dozens of houses - complete with their own private yacht berths and multiple swimming pools - sit empty while few lights are on in the apartment blocks overlooking the marina, a few kilometres away from Sentosa's giant casino.

Prices in the gated community, where Australian mining tycoons Gina Rinehart and Nathan Tinkler bought properties, fell around 20 percent in the past year as lending restrictions and taxes on foreign buyers burst a bubble in the Southeast Asian financial hub's luxury real estate market.

Investors could see the value of their assets fall even further with developers and investors still struggling to sell even after the recent price falls. Real estate websites list hundreds of flats and bungalows for sale, yet just 12 apartments and one house have changed hands all year on Sentosa, according to data from the Urban Redevelopment Authority (URA).

"The way prices have fallen in Sentosa, it's as if there is a global financial crisis," said Alan Cheong, head of Singapore research at property firm Savills.

That could mean a tough 2015 for the city state's banks unless policy restrictions are eased soon. But that looks unlikely because government-imposed curbs are having the desired affect of keeping the broader market in check after private house prices rose more than 60 percent between 2009 and 2013.

New mortgage business at the country's lenders is up to 40 percent below 2013 levels, although the downturn is unlikely to show up in their balance sheets until next year as loans are typically agreed a year ahead of them starting to be drawn down.

Compounding the problem for property investors are cutbacks in housing allowances for expatriate workers - meaning rents have fallen - and a drop in the number of high-net-worth foreigners being granted permanent residency.

..

"Some of the earlier buyers are likely to have bought at prices 20 to 30 percent above current prices," said Christine Li, head of research at property consultancy OrangeTee.

"The rental can't even cover the mortgage for these high-end investments - they want to offload but there are no takers."

So where will the next trigger be? Asia?

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Singapore banks have been lending into the London boom, with property developers hosting the same glitzy roadshows that HAM has previously highlighted in Hong Kong. However the fervour has dampened somewhat since the Monetary Authority of Singapore introduced measures to restrict high leverage on residential property (which were designed to cool the local market).

Donald Han, managing director of Chesterton Singapore:

"Of course there's some concern that the [London] bubble might burst, but at the end of the day there is huge liquidity out there. It's easy to get out of the market and you have a deep pool of buyers waiting on the sidelines."

Singapore buyers pile into London’s prime property market

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Donald Han, managing director of Chesterton Singapore:

"Of course there's some concern that the [London] bubble might burst, but at the end of the day there is huge liquidity out there. It's easy to get out of the market and you have a deep pool of buyers waiting on the sidelines."

Singapore buyers pile into London’s prime property market

That's a great quote. I wonder how long that will be true for?

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Chinese money goes through Singpore on its way to London.

So its logical that once China slows down > Singapore will follow > then London

Thats the bizarre logic of people telling me prices will not fall in London as the Chinese are buying.

They are buying all international cities its been a tidal wave of money around the world.

The difference between an actual worker buying a place in London (to be near work) and a speculator must be so vast all that is needed for reductions surely is for Chinese buyers to say hmmm I wait next year or ... better deals back home.

Also this cash buyer stuff it maybe cash at the point of transaction but along the chain someone may have a honking great loan in a holding company thousands of miles away.

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Also this cash buyer stuff it maybe cash at the point of transaction but along the chain someone may have a honking great loan in a holding company thousands of miles away.

It's not really cash either is it?Credit money extended on the back of an asset.

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"as If There's A Global Financial Crisis" - Maybe there is a crisis....I suspect it is....THE COST OF LIVING IS TOO F***KING HIGH FOR 99% OF THE WORLDS POPULATION

As ever Count,telling it like it is.

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Looks like the Chinese deflationary black hole is gathering mass at last.

You know from a large distance they look slow and majestic but sooner or later you will be pulled into that gravitational field with an urgency that crushes the life out of whole worlds.

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Looks like the Chinese deflationary black hole is gathering mass at last.

You know from a large distance they look slow and majestic but sooner or later you will be pulled into that gravitational field with an urgency that crushes the life out of whole worlds.

Nice. B)

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Looks like the Chinese deflationary black hole is gathering mass at last.

You know from a large distance they look slow and majestic but sooner or later you will be pulled into that gravitational field with an urgency that crushes the life out of whole worlds.

..what goes up ..must come down.... :rolleyes:

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