German rental housing market report: revenues increased

The demand for apartment buildings in the German market has increased significantly last year. Sales in the top 50 cities have risen by 22%, according to a study by the Center for Real Estate Studies (CRES), commissioned by the real estate association IVD.
"The turmoil in the capital markets have increased the interest in property and led to both private and institutional investors to invest more in residential real estate," says Vice-President IVD Jürgen Michael Schick. "In good and medium-sized residential areas there is currently a significant excess of demand observed, which could lead to further price increases."
Berlin, Munich and Hamburg saw the largest percentage of sales, which together represent 46% of sales. In 2010 these three cities had sales totaling 4.77 billion euros. The 10 most populous cities accounted for 71% percent of all revenues of the top 50 cities. The most active apartment building markets are concentrated in Berlin, Hamburg, Munich, Cologne, Frankfurt (Main), Stuttgart, Dusseldorf, Dortmund, Essen and Bremen.
While Munich was among the top three cities in 2010, sales fell by 16% to 905 million euros. The Munich apartment building market is relatively volatile in recent years," says Schick. "This year, it already is looking more positive. In the first half of 2011, sales increased over the same period last year by 30%.” (worldproperties.com)

Luxury residential prices in greater China and Singapore have reached peak, analysts claim

Average capital values fell 0.2% in quarter three of across monitored luxury residential markets in Asia, compared with the positive 1.6% growth recorded in the previous quarter, the latest data shows.

The Residential Index from Jones Lang LaSalle indicates that price growth has slowed steadily from the 7.4% quarter on quarter increase recorded in the third quarter of 2009, but this was the first time that average prices have declined since the first quarter of 2009.

Sales activity cooled further in the third quarter of 2011, with fewer launches and sales recorded in most markets as a result of economic uncertainties and ongoing tightening measures by some governments.

Of the eight featured luxury residential markets, only Jakarta and Mumbai saw an increase in capital values during the quarter, while prices remained stable Singapore, Bangkok and Kuala Lumpur and declined across the three Tier I cities in Greater China, namely Hong Kong, Beijing and Shanghai.
Luxury residential prices in Hong Kong edged down marginally by 0.6% quarter on quarter after growing 7.3% in the second quarter and this was due to tighter credit and weakening investor sentiment.
But in the twelve months to the end of the third quarter 2011, Hong Kong still delivered the strongest price performance among the monitored markets, with growth of around 23%. Average prices in Singapore’s luxury prime market remained stable for the fifth consecutive quarter despite slight rental correction. With mortgage and purchase restrictions remaining in place and falling sales volumes in the China Tier I markets, capital values for luxury apartments in Shanghai fell by 0.9%quarter on quarter , while average prices in Beijing fell by 3.4% quarter on quarter.

Jones Lang LaSalle believes that prices in Greater China and Singapore are likely to have reached the peak of the current cycle. Prices in China are expected to soften further over the next 12 months as developers are likely introduce more price discounts and launch less high priced units in the near term.
Prices in Hong Kong and Singapore are also expected to soften over the rest of 2011 and in 2012, partly as a result of projected rental correction as well as weaker investor sentiment. However, South East Asian markets are expected to be more resilient, with overseas workers’ remittances buoying buying demand in Manila, while the Jakarta sales market should be supported by a strong economy.
‘Though sales volume has slackened in the past months, we expect prices to remain stable as on the back of strong fundamentals. Nevertheless, with every global crisis, there will be uncertainties and uncertainties create opportunities. Foreign investors looking for a safe haven to retain wealth will continue to consider Singapore as an attractive and reliable proposition,’ said David Neubronner, head of Residential Project Sales at Jones Lang LaSalle Singapore.
‘Continued strong consumer demand and a buoyant resources sector is fuelling continued growth in Indonesia. Values are rising in spite of economic uncertainly elsewhere. We predict a buoyant luxury residential market for the medium term,’ said Luke Rowe, head of Project Marketing (Residential) at Jones Lang LaSalle Indonesia. (PropertyWire)