Asian investors see regional markets returning to normal by 4Q2010

SHANGHAI: Real estate investors in Asia and the Pacific expect to see regional property markets returning to normal by 4Q2010, ahead of other regions, according to the findings of Colliers International’s Global Investor Sentiment Survey.

Similar positive sentiments were also shown by investors in Canada, Latin America, Eastern and Western Europe as they expect their respective regional markets to return to normal by 1Q2011. Meanwhile, the US expects to return to normal a little later, by 2Q2011.

According to Colliers’ executive vice-president and director of market and economic research, Ross Moore, the survey found that perception of the market has changed structurally.

“Many investors expressed the view that real estate cycles are now shorter and more severe than historical norms, which serves as a warning to others that going forward, market participants will need to be more nimble. Access to current and insightful analysis will be more important than ever,” Moore said in a statement on April 14.

The survey shows that a majority of real estate investors in Asia believes that the global property market is at or near the bottom of the cycle, classifying the market at 6 o’clock on the Global Property Clock.

The Global Property Clock likens the market cycle to specific times, with 12 o’clock representing the top half of the market and 6 o’clock representing the bottom. The six-hour period in between 12 o’clock and 6 o’clock could be a rising (6 o’clock to 12 o’clock) or declining (12 o’clock to 6 o’clock) cycle.

The survey revealed that real estate investors also expect the Asian property market to reach 8 o’clock within 12 months.

Colliers International’s CEO, Piers Brunner said investors clearly see the market resetting “and about to enter the next up cycle”, while in Asia, the market is approaching its “reset phase”.

The survey states that respondents view Latin America at 8.30 o’clock and the Pacific region at 7 o’clock, both on an upswing movement. Meanwhile, the US and Asia both stood at 6 o’clock (bottom), while the Middle East, Eastern and Western Europe and Canada were viewed to be in the down part of the cycle.

“With the exception of Eastern Europe, respondents believe all these areas will be in various stages of the ‘up’ phase of the market in the next 12 months,” he said.

The survey compiles its findings from 244 major and institutional and private global investors with a total investment portfolio exceeding US$300 billion (RM960.9 billion).

According to the survey, real estate investors worldwide are seeing a more optimistic picture of the market, with many convinced that the next up cycle will begin in the year ahead as two out of three respondents expressed their desire to expand their portfolios in the next 12 months.

Investors who are seeking to expand also expressed higher comfort levels of doing so in their home markets, and opportunities in several emerging markets, such as Poland, Ukraine, Vietnam, Brazil and India.

“Despite this overwhelmingly positive outlook, investors are still cautious and expressed some areas of concern,” said Brunner.

According to the survey, one of the major concerns is financing, as respondents were evenly split on whether financing is more or less accessible today than it was one year ago.

However, respondents were more positive on the outlook as nearly 90% of them believe that financing would be easier to secure within the next 12 months. Most, however, believe the cost of financing would increase.