Region maintains growth

There has been far more bad news than good for property owners in most global markets for a long time. Even though real estate is a cyclical business, the present slump seems to go on and on, with little sign of an upturn.

And there's not much joy in the latest Global Property Guide house price trends index. Although United States housing markets inched up by 1.12 per cent in the second quarter of this year - contrasting with an 8.76 per cent decline in the corresponding period last year - there were "alarming price falls" in European countries. Values in Ireland, Spain, Greece, Portugal and the Netherlands are each down more than 10 per cent, while Poland and Cyprus "seem also to be slipping into the abyss", the report says.

For investors who by now must be wondering where on earth to invest their real estate dollars, Southeast Asia holds comparative appeal. As the Global Property Guide notes, while the region's countries are now feeling the pinch of the global economic downturn, and a number of hitherto "hot" markets have also slowed due to government cooling measures, their dip is nowhere near as dramatic, nor expected to be as long-lasting.

According to its data, house prices are down this year in Singapore (-3.28 per cent), Taiwan (-0.74 per cent), Thailand (-3.59 per cent), Indonesia (-0.78 per cent) and Shanghai (-3.44 per cent). Hong Kong house prices gained 3.01 per cent, but this was noted as a sharp slowdown from the 20.64 per cent annual increase during the same period last year. Notable, though, is that all of these dips are coming off a strong growth period.

Further putting these results into context is a report by Knight Frank listing the best-performing property markets around the world. In its ranking, based on the highest average growth in housing prices in the five-year period from 2006 to 2011, Southeast Asian countries occupied five of the top 10 places.

The mainland is in top place with close to 111 per cent growth, led by Beijing and Shanghai; Hong Kong second with 93.7 per cent growth; Singapore fourth (+ 50.5 per cent); Taiwan sixth (+30 per cent); and Malaysia ninth, with 28.5 per cent growth. Jump forward a year to the five-year period ending the second quarter of this year, and the region's markets still dominated the top five: Hong Kong first with 98.8 per cent growth; the mainland second +71.2 per cent; Singapore in fourth +32.2 per cent; and Taiwan fifth with 31 per cent growth.

Beyond those high-profile markets in the region, it is the emerging Southeast Asian cities that earn a tick in Jones Lang LaSalle's index of capital growth in luxury residential property. By its ranking, Jakarta led the way with a 19.2 per cent yearly jump to the second quarter of this year, followed by Manila, with 10.5 per cent growth.