Property market recovery mixed

Property market recovery mixed

SINGAPORE (Dow Jones): Property markets in Singapore, Hong
Kong, Japan and the Philippines are poised for recovery, but
prospects for China, Malaysia, Thailand and Indonesia aren't as
bright, a director of Colliers Jardine Pte. Ltd. said Friday.

David Young, a director for the real estate consultant, told a
property seminar in Singapore overall recovery of the regional
property market will be modest and less speculative.

A prime reason for a moderate recovery is the oversupply in
some of the key markets, such as Bangkok, where vacancy levels
have reached 37 percent in the office market and 30 percent in
the retail sector, he said.

"The glut has certainly been influenced by the collapse in
demand, but this is very much subordinate to the substantial
expansion of supply," he said.

The property market recovery will also depend on whether the
regional economic recovery can be sustained, particularly on
whether domestic demand and regional trade offset slower demand
from members states of the Organization for Economic Cooperation
and Development, he said.

Also, with economists forecasting moderate levels of economic
growth in the post-recovery phase, growth in property markets is
likely to be moderate too, Young said.

In China, Malaysia, Thailand and Indonesia funding for new
development will remain tight, he said, forecasting that recovery
in these countries will be slow in the medium term.

But prospects are better in Hong Kong, Japan, the Philippines
and Singapore, Young continued.

Hong Kong's residential property market has bottomed out and
prices have recovered by 10 percent to 15 percent, he said,
adding that limited supply will help firm up the prices further.

Hong Kong's office rents appear to have stabilized, too, and a
lack of supply in the central business district will underpin
recovery, he said.

Toyko's residential market has done well because of low prices
and interest rates and incentives to home buyers. But commercial
property prices will be under pressure because of oversupply,
Young said.

In the Philippines, the supply levels and vacancies have not
yet peaked, he said. On the residential property side, the
condominium market is oversupplied and investment-driven, he
continued, while the landed property market is being supported by
low interest rates.

Singapore, meanwhile, will see a moderate recovery too, other
Colliers Jardine executives said.

The island-state's private residential market recovered
because of low prices, easing some of the oversupply. But
recovery in the residential market is dependent upon the pace of
economic recovery and the stock market's performance, said
executive director Ong Teck Hui.

Oversupply in the residential market has eased considerable
since mid-1998 when there were 20,600 unsold units, he said,
adding that in the first quarter of 1999 the number had dropped
to 13,901 units.

Also, Ong said, prices have begun to rise, going up 5 percent
in the first quarter and 10 percent to 15 percent in the second
quarter. But, he noted, the price rise would have to be in line
with economic recovery as too rapid a rise could hamper sales.

Singapore's prime office property market is also set to turn
around, said Tay Huey Ying, an associate director.

Prime office rents are expected to hit bottom in the second
half of 1999 and rise 5 percent to 10 percent next year.

On the supply side, an average of 1.29 million square feet of
space is expected to be added each year for the next five years,
she said, compared with a yearly average of 2.9 million square
feet over the past five years.