Cost of land in Asia rising
Prices of residential sites in Asia increased by 1.9 per cent in the first half of 2016, down from 2.8 per cent in the preceding six months, put office land increased from 1.9 per cent to 2.2per cent. Overall development land investment volumes in Asia matched the level registered in the corresponding period last year, according to the Prime Asia Development Land Index from international real estate firm Knight Frank. As compared to the preceding six months, however, they were 40.4per cent lower and the index report explains that land markets tend to be more active in the second half of the year, which accounts for 60per cent of the transactions historically. With state owned enterprises purchasing land aggressively, China, which accounts for more than 90per cent of the deals in Asia, saw a 6per cent year on year increase in volumes while in Thailand some major deals boosted volumes by 190.4per cent. However, cross border land investment volumes fell by 11.5per cent year on year. ‘Part of the reason is that while Chinese developers have previously snatched up land in Hong Kong and Singapore, they now appeared to have joined their local counterparts to become more cautious amid the ongoing correction in housing prices in these markets,’ the report explains.
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