It appears that the luxury residential real estate market in both Singapore, and the major areas of China has finally peaked. Prices dropped slightly in the third quarter after many consecutive quarters during which they increased significantly. In fact, the minor price drop was the first decline in values since the beginning of 2009.
The slowdown in the market should come as no surprise, as both countries have passed legislation intended to control prices and sales in the residential real estate market. Analysts believe that the measures are working, and that prices have most certainly peaked in both regions. It is highly unlikely that both regions will soon experience a massive price increase once again.
Many analysts believe that the prices will actually drop in both regions, particularly due to the offering of discounts by developers. Rental correction will also continue to play a role in the softening of prices.
Other parts of Asia are still experiencing a residential real estate boom, particularly in the luxury property sector. Both Indonesia and India have seen their high-end real estate markets perform exceedingly well. As a result, prices in both regions continue to remain at high levels.
Many analysts have speculated over regulations put in place by the Chinese government, and have questioned as to whether or not their actions would be effective. It appears that, thus far, the restrictions have helped calm fears that the market may face a bubble. However, there is still great uncertainty as to how such measures will impact developers. Many developers have already reported significant losses, and there is fear that should the measures continue to be enforced, the developer community will suffer even more.
