Asia’s property markets are set for a continuous slow tightening of regulations in coming months as authorities try to slow down rising home prices without causing a crash.
Last week Hong Kong announced its fifth implementation of regulations this year as it attempts to reduce property speculation. China, Taiwan, Malaysia, Thailand and Singapore have also implemented more stringent regulations in recent months.
But investors’ interest in property continues to grow and prices continue to rise. That will likely lead governments to increase mortgage requirements again, increase land supply and – in China – to initiate even more property taxes.
Tim Condon, the research manager at ING Financial Markets in Singapore said that “My baseline scenario is we will need more measures – the current set worked but their impact is transitory.”
“We’re entering into unchartered waters because just one set of the measures introduced so far this year would have worked in previous times – but what we have right now are markets filled with liquidity and historically lower interest rates,” said Donald Han, vice chairman at Cushman & Wakefield.
According to property broker Knight Frank, Hong Kong residential prices rose by 25% from mid-2009 to mid-2010 while those in Singapore increased by 37%.