A record 83 percent fall in real estate sales has been noted in the Asian investment market. According to CB Richard Ellis the first quarter of 2009 has seen a decline from $18.02 billion in 2008 to $3.1 billion this year. The report states that Singapore, Hong Kong and Japan suffered the biggest loss in sales during that period.
The largest drop was seen in the industrial property sector which fell by 95 percent, retail plummeted by 40 percent and office sales by 89 percent.
Interestingly enough, seven out of the ten largest property deals during the first quarter were seen in the prime office market. Combined these sales were valued at $1.7 billion. Despite this, it still reflected a 81 percent drop from the previous year.
The report also stated that the inability between sellers and buyers to come together with similar expectations and the general sense of no-risk investment that prevails in the investment market were mainly thought to be the major reasons for this development.
Even so, some analysts believe to have seen an increase in the market since March.
What About India?
“The Indian real estate market more or less mirrored the Asian markets with declining transaction volumes and scarcity of capital. The investment market in India would see a revival when the global sentiment stabilises and international and domestic financial institutions and equity funds get the confidence to participate in the market.” said Mr Anshuman Magazine, Chairman and Managing Director, CB Richard Ellis, South Asia.
Due to the impact of the global economic downturn activity in the Indian real estate investment market continued to be slow.
Investment sentiment was rallying on the back of an increased confidence as investors see a slow recovery of the domestic economy in Greater China. Due to capital values falling however the volumes of transactions were still relative low in that period.
Since many investors still struggle to find equity and raise debt in Hong Kong, institutional investment activity has all but evaporated in the city.