International briefs

The Beijing skyline

China’s limit on home purchases won’t reduce demand

Many observers view the Beijing housing market as overheated, and the Chinese government is taking new measures to try to keep things in check. In addition to raising interest rates three times since October, the Chinese government has ordered local municipalities to restrict the number of homes residents can own and to require higher down payments on home purchases.

But these latest measures to cool the market likely won’t have the intended effect — they will produce pent-up demand rather than lowering prices, Jason Leow, the CEO of developer CapitaLand Ltd.’s China division, told the Wall Street Journal last month. Leow said longer-term measures that make owning multiple units more expensive — such as a real estate tax — would be more effective in preventing the market from overheating. “We prefer market mechanisms where they address the real issues,” he said. “By artificially curbing [home purchases], you’re just deferring the problem.” CapitaLand China sells about 3,000 residential units a year, and plans to put 4,000 units up for sale in the country this year. Leow said the government’s restrictions on the number of units people can buy will limit buyer activity in the short term, “but in the long term we still think demand is very strong.”

Market tightens for UK rental properties

A report by Countrywide, a leading brokerage in the United Kingdom, shows that private rental properties are moving faster this year. The report, which was released last month and looked at transactions made in the UK so far in 2011, found that the rentals are being snapped up just 15 days after the property first appears on the market, compared to 2010’s average of 20 days. The report also showed that, on average, there are 4.4 tenants looking to rent each available property, with the highest demand in the southwest of England. “The rental market has seen record levels of demand in 2010,” John Hards, co-managing director of Countrywide Residential Lettings, said. “In the final quarter, while we experienced the traditional slowdown, the continuing demand is seeing many properties in prime locations having new tenants secured within hours of coming onto the market.” The rental market surge is largely attributed to the economic downturn, which has prompted an increasing number of people to turn to rentals rather than buying.

Malaysian housing market makes a comeback

Political stability in Malaysia, coupled with a sustained economic recovery last year, contributed to a significant rebound from 2009, when house prices fell and sales dwindled, according to the Global Property Guide. The price spike in the Southeast Asian nation was the biggest jump since 2000. The country’s national house price index rose 6.2 percent year over year in the third quarter of 2010. “The recovery of the Malaysian economy has reinvigorated the overall property market,” said Abdullah Thalith, director general of the valuation and property services department in the Ministry of Finance. From January to November 2010, transaction volume rose 12.2 percent year over year, while the value of transactions rose 35 percent, Thalith said.