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Bardon

Property Pices Are Soaring

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Here on the ground, I'm seeing the exact opposite of a slowdown. And the numbers confirm that ...

Property prices are soaring: The residential condo market here in Bangkok has seen prices jump an average of 12% in the past 12 months. And that's just in local currency terms; for investors buying into Bangkok's market with U.S. dollars, prices are up even more — as much as 30% — because of the weak dollar. The amount of construction I'm seeing in Asia is astounding! In Hong Kong, property prices are up 11.25%. In Shanghai, 27.85%. In Singapore, 27.59%. New construction activity is at record highs in the above four cities. And that doesn't even count Mumbai, New Delhi, Macau, Kuala Lumpur, Jakarta — or any other Asian city where unprecedented economic booms continue.

In fact, scheduled new building starts in Southeast Asia show a 45% jump from a year earlier, driven by demand for transport-related buildings, offices, health facilities and exhibition spaces. In China, scheduled building starts are estimated to rise 21% on strong residential demand. Keep in mind, there's no subprime mortgage crisis in Asia. In the residential property markets here, lenders have almost always required a minimum 30% deposit. For commercial projects, you need to have at least 40% of your own equity involved. And that's just the property markets. Let's not forget the fact that ...

GDP is on fire: China will grow at 10% plus again this year. Thailand at up to 5.5%. India at 8.4%. Indonesia at 6.4%. Singapore at 6.5%. Malaysia at about 5.4%. Vietnam at 8.2%. Exports are surging: In 2007, Thailand's export industries sold 27.17% more goods than the previous year. Vietnam, 22.17% more. Indonesia, 14.4% more. And then of course, there's China, whose total exports for the past 12 months jumped almost 26%!

Thailand's exports (such as rubber) are surging. But all those exports aren't going just to the U.S. In fact, the U.S. share of Asian exports has fallen in the past 12 months. Most of the export growth in Asian countries is now actually going to other Asian countries. In other words, China is trading with Indonesia, Japan, Europe, and Thailand. Thailand is exporting to Vietnam, Cambodia, and Malaysia. And so forth. This is an important point to understand. It means Asian economies have matured to the point where trade among them is now beginning to eclipse exports to the West. It also means ...

Domestic consumption is going through the roof: In Thailand, retail sales are up more than 12% in the past 12 months; overall domestic consumption has risen to 56.1% of GDP. n Indonesia, consumer spending has been increasing at an annual rate of better than 10% for the past five years. Domestic consumption now accounts for almost 63% of GDP. I India, domestic consumption now stands near a record 67% share of GDP. In India, domestic consumption now stands near a record 67% of gross domestic product. And then there's China, of course, where retail sales are booming at an incredible 16.8% growth rate — and where consumer spending accounts for 37% GDP and has plenty of room to grow.

To be sure, Asians are getting richer and spending more money than ever before. As a result ...

Demand from Asia Is the Principal

Force Behind Soaring Natural Resources

The demand in Asia for natural resources is unprecedented in the history of civilization. As three billion souls have been unleashed from economic state systems into free markets and capitalism, their pent-up needs, wants, desires and dreams have been unleashed in a torrent of self-improvement as they race for better quality lifestyles. I've said this before and I'll say it again so you can understand the full impact: The world has never before seen nearly half its population explode out of repressed economies and onto the modern stage all at one time. Unless you've traveled through Asia, it's almost impossible to grasp the power of this force.

Unless you talk to taxi cab drivers ... farmers ... waiters, waitresses ... chuppies ... street food vendors ... and shop keepers, you can't really grasp the power of three billion people all moving in the same direction — regardless of the culture — at the same time aiming to achieve the same dreams we take for granted in the West. It is, by far, the largest, strongest, most enduring force to ever hit civilization. It's the industrial revolutions of England and the U.S. combined — and then multiplied 1,000 times over.

And it's the principal driver behind all the record high prices you are seeing in natural resources ...

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Good post..

but it still wont save the UK from busting big time.

Not a chance but it does show that the recession is not a global phenomenon

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Good post, can't understand why it's been moved.

The HPI in the east will add to the overall inflation in the eastern market, and this will inevitably be exported to the west.

Eventually through lower house prices and rising inflation(wage inflation will be next) house prices will revert to a mean of 3.5pct in the US and the UK.

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Good post Bardon. I considered property in China about 18 months ago, but left alone shortly after the Government introduced measures to stabilise house prices. At that point there was evidence that their measures were working, i.e. house prices dipping a little.

Prior to the Government introducing these measures, house prices were showing very strong growth. The concern was that local workers were getting priced out. From memory the principal measure used was to place a block on foreign individuals buying property there.

Do you know if foreigners buying in China have fallen and if house price inflation witnessed in 2007 were purely from locals buying?

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Good post Bardon. I considered property in China about 18 months ago, but left alone shortly after the Government introduced measures to stabilise house prices. At that point there was evidence that their measures were working, i.e. house prices dipping a little.

Prior to the Government introducing these measures, house prices were showing very strong growth. The concern was that local workers were getting priced out. From memory the principal measure used was to place a block on foreign individuals buying property there.

Do you know if foreigners buying in China have fallen and if house price inflation witnessed in 2007 were purely from locals buying?

Sorry I dont have any specific on houses. I dont know of anyone buying in the mainland and dont know about the legal aspect and foreign ownership issues.

Many buying in Bali, Thailand and India though.

I do know of a group that have a strategy to buy on the basis that unpegging currency will trigger large gain dont think thye are active though.

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The problem with Thailand though as any who has ever lived there knows, the government doesn't want you there!! And that really does mean that at any time they can and will say foreigners out :lol:

Yes you can buy a condo, but you can't buy a house... well you can't buy the land it's on at any rate. I gues that's one reasin condo prices are appreciating so quickly, the deluge of expats fed up with wherever thay are and looking for a getaway. The only thing I would warn about is going with a developer whose building QC is reliable. Seriously standards in Bangkok are shocking, so beware.

;)

Edited by unclefudgly

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Be careful about generalising when describing the Asian market. Here in Singapore the housing market has come to a standstill. Prices aren't dropping but to use last years rises as a guide to this years is dangerous.

SINGAPORE (Thomson Financial) - Singapore's property shares were lower in Tuesday morning trade following Kuwait Finance House's failure to proceed with the purchase of 97 high-end residential units in the city-state.

The Kuwait development fund has allowed its option to purchase the units at the 210-unit residential condominium project Goodwood Residence to lapse, project developer GuocoLand Ltd said late Monday. Kuwait Finance House had the option to buy the Goodwood units for 818.4 million Singapore dollars.

"We believe that the decision by Kuwait Finance House ... is a sign of weak sentiment in the physical property market currently, particularly in the high-end segment," said DBS Vickers in a note to clients.

"This action demonstrates caution on the part of Kuwait Finance and is likely to further dampen the current tepid sentiment in the property market," it said.

DBS Vickers has downgraded GuocoLand's rating to "hold" from "buy," with the stock's target price reduced to 4.14 Singapore dollars from 5.60 dollars previously.

The pullout is also taken as a strong indication that the volume of transactions in the sector will significantly decline from the peak in 2007 as global economic uncertainties fuel caution among buyers and developers.

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Be careful about generalising when describing the Asian market. Here in Singapore the housing market has come to a standstill. Prices aren't dropping but to use last years rises as a guide to this years is dangerous.

Good point Panjang anyone cosidering buying would be crazy to do so based on internet forum chatter.

China house price boom continues

2 days ago

House prices may be in turmoil in the West, but China's record boom rose sharply again last month despite government efforts to cool it, figures show. Communist leaders have been trying for three years to halt a boom in housing costs that they worry could ignite a backlash if the poor are priced out of the market. But credit limits and curbs meant to discourage speculation and increase the supply of low-cost housing have failed to slow price rises.

Housing prices in 70 of China's biggest cities rose 10.9% in February from the same month last year, the Cabinet's National Development and Reform Commission reported. Consumer inflation accelerated in February to 8.7% - its highest level in nearly 12 years - driven by a 23.3% jump in food costs, according to earlier government data. Beijing has tried to cool the boom since early 2005, worried that runaway spending could leave banks buried under unpaid loans if developers default. But regulators have moved gradually to avoid disrupting economic growth.

Beijing has repeatedly raised interest rates, tightened lending standards, boosted minimum down payments on second homes and ordered developers to build more small, low-cost units. In February, housing prices in some cities rose much faster than the average, according to the NDRC. Prices in Urumqi in the desert north-west soared by 24.2%, in the port of Ningbo south of Shanghai by 18.9%, and in Beijing by 16.5%. February's rate of increase was 0.4% lower than January, the agency said. "Housing price growth has been slowing as the government's macroeconomic policy began to pay off in the fourth quarter last year," the official Xinhua News Agency quoted Qi Ji, a deputy construction minister, as saying.

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  • 298 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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