Tokyo's Residential Asia Forecast for 2014 seems promising.

 

Following several years of dismal performance, real estate investors are focusing their attention on the developed world in 2014. Many people believe that some of Asia's classic high fliers and most popular investment sites are overpriced, putting them in perilous zone where the possibility of a bubble bursting is considerable. buy house in qatar

According to investment firm Macquarie, property values are gradually decoupling from economic fundamentals in countries like Hong Kong and Singapore, as well as in Australia's main cities. This boosts the possibility of bubbles forming, albeit the bank believes we have not yet reached that point.

"We are concerned that Singapore has one of the most overextended real estate markets in the world, and that it is only a matter of time before it corrects," the business warns. Macquarie believes Hong Kong is in a "typical bubble."

Both countries have imposed an additional 15% tax on foreign buyers, denting the two city-states' reputations as open economies. Mortgages in Hong Kong, which "imports" U.S. rates through a currency pegged to the U.S. dollar, and Singapore, which manages its currency in comparison to a currency "basket" with a large U.S. dollar component, are likely to become more expensive when U.S. interest rates slowly begin to rise. Property prices in Hong Kong are expected to drop by 10% next year.

Many people blame Chinese customers for raising prices across Asia. Property is viewed as an effective way to store wealth by Chinese individuals, given there are few other options for investing money in China. So, after more than four years of restrictions at home, they're trying to expand their horizons - and stash some wealth outside of China, albeit illegally, because Chinese nationals are only allowed to shift $10,000 overseas per year in theory.

Their impact, however, has spread far and wide, not only in the West but also in most Asian countries. One exception is Tokyo, which, after more than two decades of stagnation, is suddenly showing signs of life - albeit that may soon reverse.

According to Knight Frank's prime global cities index, the Japanese capital's prices have risen 13% in the last year, with the gains accelerating as the year progressed. While Japan's population has been declining since 2010, reducing the need for new housing stock other than for house upgrades, there is hope that the Land of the Rising Sun would recover under Prime Minister Shinzo Abe's plan to increase government asset purchases - at a time when the US is planning to decrease its own program.

Winning the 2020 Olympics has already boosted apartment prices near Tokyo Bay, which are expected to soar by 20%, according to property firm Sanyu Appraisal Corp. The Olympic village will be located in Harumi, on reclaimed bay area just a few miles south of the city center. 84 percent of the venues will be within five miles of the village, with a journey time of less than 20 minutes.

Japan is one of the few Asian countries where property acquisitions, particularly by foreign buyers, are not restricted. Although it is not an easy market to navigate, it, like its neighbor South Korea, allows foreign people full access to its property markets.

This shows, according to Freya Beamish of Lombard Street Research, "that Japan is now benefiting from second-round effects of Asia's overheated property," she says in a research. "Chinese individual investors appear to be dipping their toes in the water and seeing Japan as a potential next destination, a wave that might be bolstered once China's capital controls are eased."

Indonesia has been the year's standout performer and a pleasant surprise. According to Knight Frank's residential index, home prices in the capital, Jakarta, rose the most in the world last year, rising 27.2 percent. Rising middle-class income and a resource-fueled economy that is becoming increasingly fueled by local spending rather than exports are driving up housing values. Foreign buyers are not allowed to buy property, however temporary residents can lease certain types of homes for up to 25 years.

Despite the fact that China has a substantial presence in Indonesia's business community, the country's home-price rises are unlikely to continue, and prices remained level at year's end. The reason for this is that Indonesia's economy stagnated in 2013 following three years of above-average growth. It's predicted to rise at a still-healthy 5.5 percent next year, but it's still a deceleration that has resulted in severe sales declines. Fearing that the market had become too hot, the central bank tightened lending limits, raising the necessary downpayment to 40% for a second property and 50% for a third, up from 30%.

In 2013, the rupiah, Indonesia's currency, plummeted 11% versus the US dollar, while the rupee, India's currency, plunged 19%. Fears that money will flow out of emerging markets as the Fed "tapers" its quantitative stimulus, raising US rates and strengthening the dollar, hit both countries hard. That may happen if the Fed cuts rates again next year as expected, and the central banks in Indonesia and India raise interest rates to entice foreign funds and investors - interest rates that would damage property demand.

Other Southeast Asian markets have seen gains ranging from 2.5 percent in Bangkok, Thailand's capital, to 6% in Kuala Lumpur, Malaysia's largest city. According to Jones Lang LaSalle, Manila is in the middle of the pack with 3.4 percent yearly growth but is seeing significant sales activity and significant demand from local investors. This points to a strong year for property in the Philippines' capital.

Prices in the former Portuguese province of Macau continue to soar as a result of a casino boom that has seen it overtake Las Vegas as the world's gaming capital. According to the most recent numbers available, prices in the only place in China that allows casino gambling increased by 10.5 percent year over year in October. However, as prices rise and as Hong Kong faces uncertainty, volumes have dried up, with the number of residential transactions dropping 58 percent from 2012.