The once richest lady in China’s “Babylon” has lost half of her fortune due to recent cracks in the Chinese property market. The 27 year old, once worth an estimated $17.5 billion has lost around half of her worth since taking her company public about one year ago.

Yang Huiyan is one out of 80% of people in China who top the richest people list, having managed to acquire a fortune with real estate investments. She is the major shareholder of Country Garden, a high end residential developer. The worst affected listings are those in the big cities of southern China, namely Shenzhen. Once a hot property market, the price of flats have fallen by 28% since October 2007.

Beijing on the other hand shows a somewhat level playing field with leveled prices but a lower rate of appreciation altogether.

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With all the doom and gloom surrounding the property markets, we felt it was about time to take a look at those markets that have remained robust and healthy throughout the current credit crunch. So here are five markets that have consistently performed well, regardless of the ups and downs seen recently.

Manhattan, New York

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If mortgage approvals are any bench mark, Hong Kong’s already fast paced economy is about to get another shot in the arm. Approvals last month reached their highest level in ten years. This November, saw a rise of 76% over last year’s new mortgages, lending over $3 billion US.

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Price per square foot can be an interesting approach to pricing real estate and we though it would be interesting to compare luxury condominium prices around the world to other types of space for sale. How much space in a luxury condominium would you get for £100,000? These prices are based on Knight Frank’s annual wealth report 2007 and may have changed slightly since then. These are the top ten contenders.

1. London

London currently tops the list. £100,000 buys you 43.5 square feet. Coincidentally, this is exactly the same footprint as the Ford Escape, an American SUV. So you can rest assured you will be able to park the car at this price.

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A luxury flat in Hong Kong has set a new record as the most expensive apartment in Asia. The price was a whopping US$36.3 million. The penthouse in Hong Kong’s upscale Mid-Levels district sold earlier this month for a record US$5,142 per square foot, the South China Morning Post reported on Saturday.

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Despite the strength of the upper echelons of the property markets, concerns about the spreading effects of the US sub-prime mortgage crisis are having effects further and further afield.

Asian bond spreads widened in Hong Kong this week, with the popular iTRAXX Asia ex-Japan high-yield index widened by 20 basis points, in turn raising the costs of protecting investors against defaults or restructuring.

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According to “Emerging Trends in Real Estate® Asia Pacific 2008,” just published by the Urban Land Institute (ULI) and PricewaterhouseCoopers LLP, Shanghai, Singapore and Tokyo rank as the three most promising Asia Pacific cities in terms of real estate investment prospects.

David Sandison, a Tax Partner with PricewaterhouseCoopers in Singapore said, “It is expected that even greater amounts of capital will be flooding Asia Pacific real estate markets in 2008. The real challenge for investors will lie in finding the right assets against the backdrop of yield compression and scrutiny by regional governments and tax authorities.”

Shanghai topped the list for investment prospects, edged up from its second-place ranking last year. Singapore received the highest rating of any of the cities included in the report in terms of overall risk.

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Although Hong Kong experienced its share of the market turbulence last month with the Hang Seng falling from a high of 22540 on 8^th August to 19386 nine days later, it has since reached a new peak of 24089 on the last day of the month. Clearly, Hong Kong stocks are very much part of the ‘China story’ and the same has been the case for the territories property market up until now. The Colliers International Hong Kong Property Market Overview published in April 2007 was optimistic and cited the following big picture influences: benign effects of Chinese growth (chiefly the boost to Hong Kong as an entrepot and the numbers of mainland tourists), local stock market growth and the expectation that interest rates would come down in the US.

^{Hong Kong Harbour [photo credits to OZinOH]}
The optimism in the Spring centred around the upcoming inauguration of the Western Corridor, providing improved transport between Shenzhen and the northern New Territories, and the very impressive HK$1.8bn paid by Sun Hung Kai for the 12 Mount Kellet Road site on the Peak (which translates into accommodation costing HK$42,196 per square foot). Read the rest of this entry »

The fundamentals remain positive for the property investment market despite the latest turmoil in the stock market, with investors especially keen on buying office and luxury residential units, consultant Savills said.

Managing director for Savills (Hong Kong) Raymond Lee Wai-man estimates transactions for the investment market in the private sector may hit HK$70 billion this year, up 8.86 percent from about HK$64.3 billion last year.

Senior director for investment Peter Yuen Chi-kwong pointed to favorable factors such as yuan appreciation, the reappearance of negative interest rates, continued capital inflow from overseas funds and attractiveness of returns.

As for interest rates, he said: “We can’t see interest rates increasing.”

Savills recently conducted the sale of Crocodile House and Crocodile House 2 in Central - indirectly owned by toy magnate Francis Choi Chi-ming - which was sold to an overseas fund for HK$1.07 billion. Savills also conducted the HK$1 billion sale of The Hacienda residential estate in Repulse Bay, also indirectly held by Choi, to Cheung Kong (Holdings) (0001).

So far this year, Savills accounted for HK$4.5 billion in investment deals out of the HK$7.5 billion market total.

Deputy senior director for investment Sam Mock Wai-ho said the HK$7.5 billion figure was double the figure for the same period last year, after stripping out the effect of the HK$6.2 billion sale of a 50 percent stake in Festival Walk mall in Kowloon Tong by CITIC Pacific (0267) to its joint-venture partner, Swire Pacific.

Still, some uncertainty remains, with Yuen pointing to the volatility in the equity market and the large supply of office space in 2008 and 2009 in areas such as Quarry Bay and Kowloon Bay.

Source: The Standard