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Positive Developments in Regional Markets

By on Jan 26, 2015 in Property News, Residential, Retail

News-aisapropreport_23jan-02

Recent developments in the Asia Pacific region’s key real estate markets show that the industry is headed into a positive direction this year, according to CBRE Research.

India

India’s booming real estate industry under Prime Minister Narendra Modi is expected to get another boost, thanks to the policy rates cut from the Reserve Bank of India (RBI).

“The rate cut is good news for the real estate sector as it will result in the reduction of mortgage rates. This could stimulate an uptick in residential sales and positively impact developer liquidity,” explains Abhinav Joshi, associate director at CBRE India.

“Bank lending to developers has been tight for some time whilst sentiment among homebuyers has been subdued. 2014 saw a decline in residential sales, particularly in the Delhi-NCR (National Capital Region) and Mumbai, as well as a slowdown in new project launches and an increase in inventory levels,” he added.

Among the RBI rate cuts include the reduction of repo rate, which is down to 7.75 percent, and the reverse repo rate to 6.75 percent. Per CBRE forecast, additional rate reductions could be introduced this year, which would make the local property market even more enticing for domestic and foreign investors.

Thailand

There’s a new rush of condominium launches in Bangkok’s midtown and suburban markets, according to James Pitchon, executive director at CBRE Thailand. The main concern at the moment, however, is the potential oversupply in these areas, which expect some 87,000 new units that will be completed within the next two years.

In downtown Bangkok, prices of newly launched condominium projects are expected to continue rising, based on CBRE’s Bangkok Overall Q3 2014, report released early this month. As the Kingdom moves on from last year’s political upheavals and economic stresses, market insiders are optimistic that the domestic real estate and hospitality sectors would continue to slowly recover, aided by joint ventures being formed by local and foreign entities.

Despite the slowdown in retail sales last year, Bangkok’s retail segment is also starting to look up, with more than 1.6 million sqm of retail space under construction to be completed over the next three years, including the highly anticipated Em District by The Emporium Group located in central Sukhumvit.

Vietnam

Foreign direct investments (FDI) in Vietnam are helping to push the local property sector on the road to full recovery, per CBRE Vietnam. According to the country’s Foreign Investment Agency, the ASEAN is a big source of FDI in Vietnam, with Singapore leading the pack with 1,353 existing projects valued at USD32.7 billion.

Another ASEAN co-member, Malaysia, is also bullish on the Vietnamese market, with more than USD10 billion worth of projects in the country up to November 2014. Malaysian investors also inject relatively more money into Vietnam. On average, the level of an FDI project in Vietnam is USD14.3 million, but Malaysian projects average at USD22.5 million each, per CBRE’s study.

Bangkok by Mark Fischer was used under a Creative Commons licence.

Source | Asia Property Report 23 January 2015

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