Jones Lang LaSalle

Jones Lang LaSalle Head of Research (Asia Pacific) Dr. Jane Murray said in the report Asia Pacific Property Digest Second Quarter 2008, that ‘The Asia Pacific property markets are entering a correction phase that will continue over the next 12 months at least.’

Jane Murray, however, noted that in contrast to previous cycles, the extent of the downturn is expected to be moderate in most markets in Asia Pacific given the underlying sound fundamentals.

She  pointed out that potential oversupply is becoming an issue in some parts of the region, notably tier I cities in China.

The Jones Lang LaSalle report highlighted that the retail sector has continued to perform well over the first half of the year, with Hong Kong and Shanghai posting the highest rental growth in the region.

However, it said that emergence of more difficult trading conditions, coupled with new supply coming on line in number of markets is likely to result in more moderate rental growth going forward.
Source: Trading Markets

Visitors to a real estate show in Xian.

China has joined the United States, Britain, Spain and others on the list of nations suffering a real estate decline.

Although the last national statistics showed single-digit growth from July 2007 to July 2008 in the average price of commercial and residential real estate, real estate brokers say prices are down from peaks reached earlier this year, while the number of transactions has plunged.

This downturn comes as the growth rate of Chinese exports has slowed — sharply in renminbi terms — and stock markets have plummeted.

The confluence of events has resulted in what economists describe as a deceleration in China’s economic growth — although at nearly 10% it is doing better than almost any other nation.

Brokers say that sales volumes first dropped precipitously in southeastern China, and then the decline spread across the country. Faced with few buyers, sellers started cutting their prices for residential and commercial real estate.

In some neighborhoods in the southeast, prices have dropped by 10 to 40%.
Much, much more on this HERE.
Source: New York Times

Chinese real estate

According to Hang Lung Properties, China will remain a major real estate powerhouse even after the Beijing Olympics and despite the backdrop of weaker property prices.

Chairman Ronnie Chan said long-term players would have to devise ways to overcome the bear market.

At the Forbes Global CEO forum he said, ‘Property is a long gestation industry.’

He said the biggest opportunity in China would include the large commercial and retail investments which could still bring in double-digit returns.

He said, ‘China is an opportunity of a lifetime and we are buying land for future projects.’

Hang Lung has allocated $5 billion for projects in China and already had nine projects under way.
Source: The Star Online

Vanke project

China’s biggest listed property developer, reports its real estate sales plunged 35% from a year earlier to RMB4.07 billion ($595 million) in August.

In terms of area, sales sank 33% to 474,000 square meters during the month. China’s property market has been faltering since late last year because of a slowing economy and cooling speculative purchases in high-end urban areas.

Vanke reports that in the first eight months of this year, real estate sales rose 5.0% from a year earlier in value terms to RMB31.31 billion, but shrank 4.8% to 3.49 million square meters in terms of area.

Early last month, Vanke reported a 24% rise in net profit for the first half of this year but scaled back its real estate development plans for the second half of this year.

It originally planned to start work on 8.48 million square meters of space and complete work on 6.89 million square meters this year, but revised those targets to 6.83 million and 5.86 million.
Source: Reuters

Beijing property faces quiet season

Chinese property developers, hard-pressed by falling sales and tightening credit, have never waited for ‘Golden September and Silver October’, the traditional hot season for the property market, this anxiously.

But experts say they are likely to be disappointed this year as there is no sign of any recovery in the sector because of a glut and stricter credit controls.

The soaring supply in September, including a large number of low-cost units, will be partly responsible for blocking the chances of any market rebound in Beijing.

There will be nine low-cost housing projects and 27,000 apartments entering the capital’s property market before the end of October, with the average price being RMB4,000 per sq m lower than the commercial ones.

According to Yahao Real Estate, a Beijing-based property brokerage firm, around 80 commercial residential projects will be put up for sale in September and October.

The situation in Shanghai isn’t much better. Property prices have held steady there in the past months but are now showing signs of a meltdown.

The government shows no signs of easing on the credit policy for real estate firms.
Source: China Daily