The Asia-Pacific real estate sector, with an estimated worth of USD4.6 trillion, has overtaken the European property market for the first time ever to become the largest in the world.
According to data compiled by integrated property services group DTZ, the Asia-Pacific market grew 9 percent, year-on-year, in the past year and has topped Europe, which only strengthened by 2 percent, valued at USD4.4 trillion, the Financial Times reported.
Analysts attribute the rapid growth to mainly to China’s real estate industry, which recently surpassed the Japanese market with a compound annual growth of 32 percent in the last ten years. It has also become the region’s property leader, despite a recent slowdown of the Chinese market and concerns of a possible developing bubble.
“But the problems in China will not be as severe as in Europe, because the leverage ratios are not the same,” DTZ global head of research Hans Vrensen told the Financial Times.
Nearly half of the tallest skyscrapers in the world that were constructed in the last four years are located in China, the Middle East or Southeast Asia, based on a study by insurance company Allianz. At present, 50 percent of the world’s tallest buildings are based in Asia.
“These buildings are prestige objects to show the power and wealth of these areas and regions,” according to the Allianz research.
Reports of a slowing Chinese property market, which is partly due to China’s cooling economy, have caused concerns. One tycoon, Song Weiping, chairman of Hangzhou luxury developer Greentown China Holdings, reportedly resigned his post because of the slumping market, The Wall Street Journal reported last month.
Yu Liang, chief executive of China’s biggest residential developer based on revenue, Shenzhen-based Vanke, whose quarterly profit declined for the first time since 2002, told the South China Morning Post that although China’s “golden age” in real estate had passed, “all the talk about a looming crisis is misplaced” and instead described the current situation as China’s “silver age”.
The latest DTZ report also stated that China has become the second largest market in the world, behind the United States. “Everyone wants to have a share of the Chinese market and maybe that opportunity is coming up now as developers need to fund their upcoming activity by selling off some of their assets,” Vrensen said.
Image credit: SCMP / ImageChina
Source: www.property-report.com
