It has been over a year since the great tumble of the western banking system and collapse of Lehman Brothers and still the real estate markets in Asia are standing there ground and gaining traction. As property prices and rentals dropped in the west, prices have risen in Asia.
Somewhat due to the China market stimulus packages driving a real estate frenzy with wealthy Chinese buying as much real estate as they can get there hands on.
Real estate transactions in China are at record highs while prices continue to rise, we have yet to see many distressed sales or large foreclosure’s in Asia as extra liquidly is available, loan to value ratios are very low, many Asians pay cash for real estate.
Conditions of real estate investment in Asia are still extremely tight and bank lending will decline and we will begin to see lower returns in the future.
Currently Japan stands as the most likely country to display foreclosed and distressed property, western funds and investment banks are continuing to focus on Asia while many Asian institutional investors and sovereign wealth funds seek distressed property deals in the west.
Based on reports and research the top five emerging markets are Shanghai, Hong Kong, Beijing, Seoul and Singapore. Its clear to see that the Chinese cities are rising with the government funded stimulus packages, we could defiantly be seeing a Chinese real estate bubble in the very near future.
Somewhere that isn’t on the top 5 but is still becoming a popular destination for foreign funds is Australia due to its mature real estate market and commodity driven economy.