Housing prices in the Asia-Pacific have been boosted this year thanks to record-low bank interest rates, rapid vaccination rates and the economic recovery of some countries after Covid-19.
The annual property price growth in the region was 6.4% year-on-year, said Victoria Garrett, head of population tracking for Asia Pacific at Knight Frank. - is the highest increase in the past 4 years.
Analysts and real estate businesses say there has been fierce competition among home buyers, leading to price wars and sky-high cash payments that exceed market valuations.
More potential buyers than opportunities in the market make auctions more intense, says Sean Coghlan, global director of strategy and capital markets research at JLL. According to him, this has been seen in the housing segment and some separate pieces in logistics real estate.
Kenneth Tan of property agent PropertyLimBrothers says that some buyers don't even come in to view homes. "They decide after seeing the house from the outside or just watching the tour video," he said.
Bidding for homes is sometimes "crazy," Tan describes, with properties valued at $2.2 million or more sometimes attracting offers of up to $600,000 in cash. USD.
Mohamed Ismail Gafoor, CEO of Propnex shared, investors are fighting for land and trying to pay higher prices. This will cause the house to continue to escalate. "Everybody knows next year house prices will be much higher, as the cost of land and construction doesn't drop," he said.
According to him, there have been fierce auctions in Singapore to compete for luxury bungalows, costing up to tens of millions of dollars. This housing segment has recently been attracting attention when it comes to famous technology entrepreneurs.
Regina Lim, head of capital markets research at JLL Asia Pacific, commented that the reason for the boom in housing prices is partly due to low interest rates, loose monetary policy and "the distribution of unequal improvement" in the period of Covid-19.
"House prices are likely to continue to rise with income and wealth unless interventions are taken to reduce the attractiveness of this sector," Ms Lim said.
Analysts also said that a hot increase in house prices may soon attract governments to intervene.
New Zealand was once expected to raise interest rates, but the Delta variant that caused a series of infections forced the central bank to keep rates steady. Similar to South Korea, analysts had expected interest rates to rise due to a sharp increase in house prices in New Zealand.
In Singapore, analysts also expect more restrictions as the country's leaders warned last year that homebuyers should be wary of the possibility of rising interest rates.
Earlier this year, Piyush Gupta, CEO of DBS bank, said that people are trying to "prepare" measures to cool down the real estate market.
According to Vnexpress
