IP Global Property Barometer (Q3 2011)


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IP Global Property Barometer (Q3 2011)

  1. 1. 3rd QUARTER 2011 PROPERTY BAROMETERSOUTHWARK, LONDON MANHATTAN, NEW YORK KUALA LUMPUR, MALAYSIASouthwark’s residential market stayed buoyant New York continues to make a strong case The robust economic growth in 2010, during which the economy grewthroughout the rst half of 2011, with residential values for investment and looks considerably 7.2%, has resulted in higher residential prices this year. Malaysia continuescontinuing to increase. This inner-city suburb of London more attractive than the rest of the United to be the recipient of record levels of foreign direct investment (FDI).is currently undergoing extensive regeneration around States. Government incentives such as the According to UNCTAD, Malaysia received a record tally of US$7 billionLondon Bridge. Notable projects include the Shard, Lower Manhattan Development Corp.’s in FDI in 2010 , up from just US$1.4 billion in 2009. The government’ssoon to be the tallest building in Europe. The area is US$2.78 billion nancial action plan and own stimulus package will encourage further economic growth, which weknown as London’s cultural quarter, with attractions residential tax abatements in the nancial believe will have a positive impact on the property market. The Mass Rapidsuch as the Tate Modern art gallery, the Globe Theatre district are encouraging investor demand. Transit (MRT) project in particular will be a catalyst for growth in suburbsand Borough Market. The regeneration of Southwark The downtown area saw the strongest that lie adjacent to the proposed lines, including Mont Kiara.will attract more a uent residents to the area, which demand in 2010, accounting for 37% of allwill result in an alpha e ect in property prices. Over the units sold in Manhattan. Condominium The Real Estate and Housing Developers’ Association of Malaysialast ve years, capital values have already risen sales in Manhattan jumped 33.2% from predicts prices will increase between 15% and 30% in KL over the33%, outperforming London’s average the 964 recorded in Q1 2011, with course of 2011, with consensus estimates collected from a range of 1performance by 73% over the same period. Rent two-bedroom units accounting for 41.8% market observers suggesting increases of 7% to 10%, on the back oflevels in London have continued to rise in 2011. of all condo sales. Average Manhattan strong economic growth and continued high transaction volumes.Over the last 12 months, prime London rents sales prices were 1.3% higher for Q2 Overall sentiment in the real estate market therefore remains positive,have risen by 10% and now stand at an average of 2011, compared with the same period although at a micro level there are some concerns regarding an oversupply4% higher than their 2007 peak. Flats, now 4.9% last year, at an average price of US of condominiums in certain locations. One of the longer-termabove the 2007 peak, have outperformed houses, $1,702,079. 3 We expect this market to consequences of the high levels of inward investment into Malaysia will bewhich are 2.1% above their previous high. The continue to perform well on the back of a increasing demand from multinational and Malaysian companies forunderlying factors driving the surge in rents are the lack continued supply/demand imbalance international-standard o ce space and for high quality, luxury residentialof supply and the growing demand from would-be and sustained demand from overseas apartments. Kuala Lumpur continues to be one of IP Global’s primarybuyers unable to access home ownership.2 buyers. markets, and we expect performance to remain robust throughout 2011.1 Land registry2 http://www.propertywire.com/news/europe/central-london-rental-market-201107065334.html3 http://www.millersamuel.com/reports/pdf-reports/DEmanhattansales2Q11.pdf LONDON NEW YORK MANHATTAN, MALAYSIA NEW YORK SOUTHWARK, SANTIAGO LONDON HONG KONG HONG KONG LAS VEGAS, NEVADA NEVADA KUALA LUMPUR, MALAYSIA SANTIAGO, CHILESANTIAGO, CHILE HONG KONG LAS VEGAS, NEVADAChile’s economy is thriving on the back of high prices for The Hong Kong government implemented additional cooling In April, Las Vegas house prices fell for the seventhcopper - Chile’s main export - as well as good scal policy measures in June 2011. Buyers of homes that cost more than HK$7 consecutive month, dropping 0.9% and leavingand a fast recovery from last year’s earthquake. The million but less than HK$10 million can now only apply for a maximum them down 6.2% compared with the same timeeconomy is expected to grow 6% - 7% in 2011. Chile’s loan-to-value ratio of 60%, subject to a cap of HK$5 million. For last year. That is worse than the average year-on-yeareconomic surge has been re ected in the residential properties worth HK$10 million or above, the maximum loan-to-value decline for 20 major US cities, which averaged amarket, with property values in Santiago jumping ratio is 50%. Since these measures, sales at ten of Hong Kong’s decline of 4%. Nevada has the highest foreclosure59% over the last two years.4 The rental market in biggest residential developments fell 58% over a weekend. rate in the United States, with almost one inSantiago has performed equally well, with rents up 50% Property transactions fell for a fth straight month in May, but homes every 103 homes receiving some type of 6in the same period. Investors are achieving yields of prices still increased by 1.3% in early June, according to Centaline. foreclosure ling. The high unemployment rate of 56% and above .The recent capital growth supported by Home prices have risen 11% so far this this year, according to 12.4% continues to harm the local market, with manythe most-developed secondary mortgage market in South government estimates. With the measures, we expect price growth construction jobs still being lost. While this continues,America makes this market one to monitor. to slow down to a stable and robust level over the rest of 2011. a recovery in the residential market is unlikely.4 Reidin.com 6 http://www.bloomberg.com/news/2011-06-13/hong-kong-home-sales-tumble-after-government-raises-down-payments-on-loans.html5 http://www.businessinsider.com/why-chilean-real-estate-is-a-bargain-2011-5 Please note information has been taken from third party sources. References are available on request.IP Global is the trading name of IP Real Estate Investments Pte Ltd, which is licensed under the CEA – number L3010023I