Is the Asian real estate market crashing?
IMF says economic destabilization in the world affects housing prices.
Globally slowing real estate market Singapore, Hong Kong and Sydney cities were adversely affected. A simultaneous decline in house prices globally could lead to “financial and macroeconomic instability”, the IMF said in study released in April.
The common problems of these cities are the increase in the cost of borrowing, the increase of state regulations and the variable exchanges.
“As China’s economy is affected by the trade war, capital outflows have become more difficult, thus weakening demand in markets including Sydney and Hong Kong,” said Patrick Wong, a real estate analyst at Bloomberg Intelligence.
The real estate sector was hit in Hong Kong, one of the cities selling the most real estate in the world. Values in the city have fallen for 13 weeks straight since August, the longest losing streak since 2008, figures from Centaline Property Agency show. Concerns about higher borrowing costs and a looming vacancy tax have contributed to the slide.
Real estate prices have dropped in Singapore, which has the most expensive real estate prices in the world. Last month the government decided to apply stamp duty. “Landed home prices, being bigger ticket items, have taken a greater beating as demand softened,” said Ong Teck Hui, a senior director of research and consultancy at JLL.
Sidney has experienced the worst real estate decline since 1980. Average home values in the harbour city have fallen 11.1 per cent since their 2017 peak, according to CoreLogic data released on Wednesday – surpassing the 9.6 per cent top-to-bottom decline when Australia was on the cusp of entering its last recession.
Sevdenur Demir / realestatecoulisse.com
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