High-end home prices get higher In China
Despite sluggish sales in the market for newly built homes, the average price of a home is increasing in China, and high-end homes in particular are proving to be a lucrative investment for those who can afford them.
Sales of new homes fell more than 40 percent by mid-year 2007 over a year earlier. However, a government survey shows that home prices on average rose 8.2 percent this August over last year.
High-end developments in Beijing have hit record levels this year. Projects that were selling for $112 per square foot a few years ago have reached prices of $230 to $370 per square foot in 2007. A booming stock market, trade surpluses and the coming 2008 Beijing Olympics are said to be contributing to the market’s performance.
The increases are happening even as international investors are being squeezed out of the market. A 2007 nationwide law aimed at calming foreign speculation limits expatriates to the purchase of one home in China, and only after they have lived there for a year.
Residents of Hong Kong and Taiwan now account for around 15 percent of luxury market purchases in Beijing, the International Herald Tribune reported.
Delhi funds public transit with commercial leases
A public transit system in Delhi is being developed by federal and city governments with 7 percent of its $1.5 billion price tag coming from commercial real estate revenues. The first phase of the Delhi Metro Rail was completed last year.
The project is modeled after the Hong Kong Metro, which generates 50 percent of its budget from commercial leases.
The Delhi system is granting long-term leases on extra space at its stations for the development of retail. Some of these locations have become large-scale malls, like the Kashmere Gate station, the International Herald Tribune reported.
The Delhi Metro Rail Corp. first began offering 99-year commercial leases at stations, before opting for 30-year leases that the corporation could choose not to renew. A 30-year lease on a site of three hectares, almost 7.5 acres, could cost $7.5 million. Kiosks and outlets inside stations have 12-year licenses for around $1.50 per square foot per month.
Betting on peace, buyers look between Koreas
The demilitarized zone at the border between North and South Korea has become attractive to speculators as ties between the nations warm and economic cooperation looks more likely. Even land-mined areas in and around the zone have doubled or tripled in value in the last three years.
Land in the Civilian Control Zone, 10 miles south of the demilitarized zone (DMZ), is selling for $9,300 per acre — double its price from five years ago, but still cheap by South Korean standards, the International Herald Tribune reported. The nations are still officially at war (the Korean War was never formally ended between the two countries), and construction in the Civilian Control Zone is restricted to low-lying buildings. But the land is attracting buyers who anticipate peace between the nations. Some have turned a profit on parcels by simply de-mining them and then reselling.
Land inside the 2.5-mile-wide DMZ itself, where only soldiers and residents are allowed to enter, is selling for around $1,300 per acre.