Wow. Just wow.Posted: November 8, 2009
The Wall Street Journal says a manic buying frenzy is underway in Asian real estate:
In Hong Kong, high-end real-estate prices are soaring. A luxury flat in the tony Midlevels district is expected to sell for US$55.6 million, or $9,200 a square foot, said developer Henderson Land Development Co. Elsewhere, a bidder at a city-run auction to operate food stands at February’s Lunar New Year celebration recently paid a record US$63,225 for the right to occupy a 400-square-foot stall to sell fish balls and other snacks. Prices in the auction of 180 stalls were up 33% from 2008.
Over the summer, a Singapore condominium developer raised prices 5% the day before units went on sale. After dozens of would-be buyers lined up on a steamy night, the developer — a joint venture of Hong Leong Group and Japan’s Mitsui Fudosan — held a lottery for a chance to bid on the units. Singapore home prices rose 15.8% in the third quarter, the fastest rate in 28 years.
Shanghai-based business owner Todd Fleckenstein posts this remark in the comments section of the WSJ article:
Two weeks ago a limited number of villas went on sale here in Shanghai at RMB 77,000 m sq. or roughly $11,325 m sq. or $1,030 f sq. Absolutely insane. That’s $3.4m for 3300 f sq. villas. They are rickety, poorly constructed homes that will not last 25 years. I have walked through them several times and they sit on on postage stamp sized lots 15 km outside the city. 11 were sold on the first day. I would honestly value them at less than 20% of the amounts being paid….
Related: “Hong Kong Faces Property Bubble Explosion as Home Prices Rise 28% This Year”