Asia-Pacific’s Realty Boom Sees Buyers Bidding up Prices
Housing prices have shot up across cities in Asia-Pacific this year, fueled by record low interest rates amid the pandemic. Optimism has also gained steam as vaccination rates gain pace, and some countries move toward a post-Covid recovery. “As companies move to a hybrid work model — a mix of working from home sometimes, and in the office at other times — demand for larger homes has also picked up,” analysts say.
The overheating in property markets across some Asian cities has led to wide expectations that governments will intervene through housing curbs or other measures such as fiscal or monetary policy. South Korea, for instance, hiked interest rates for the first time in three years in August – analysts attributed the move to rising home prices and increasing debt.
On average, the annual growth across Asia-Pacific was at 6.4% year-on-year — the highest increase in four years, according to Victoria Garrett, head of residential Asia-Pacific at Knight Frank. Analysts and real estate agents say there’s been intense competition among home buyers, leading to bidding wars and sky-high cash offers way beyond market valuations.
Bidding has been so frenzied, their listings have attracted cash offers that can be up to 800,000 Singapore dollars (about $595,000) more than the official price valuation for properties priced at over 3 million Singapore dollars ($2.2 million). For those with valuations over 1 million Singapore dollars, his agency has received additional cash offers of up to 80,000 Singapore dollars. All-cash offers are also on the rise – typically for properties between 4 million Singapore dollars to 8 million Singapore dollars, according to Tan.