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Updated Thursday, September 2, 2010 10:07 pm TWN, By Bernice Han, AFP

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Asian markets strike early to ward off US-style property bubble

“And when the bubble bursts, not if but when it bursts, there will be severe implications for individuals as well as for the economy as a whole,” he said.

Singapore's latest measures are aimed largely at buyers who have at least one outstanding mortgage.

The minimum cash down payment was raised from five to 10 percent of valuation, while the maximum amount a bank can lend was capped at 70 percent, down from 80 percent. The balance can be taken from a buyer's pension fund.

“This round of tightening appears to be the most draconian,” said CIMB bank analyst Donald Chua.

In Hong Kong, the territory's richest man Li Ka-shing snapped up in August two prime residential sites at prices well above market estimates.

On Tuesday, another developer paid US$165 million for a plot of prime land in the teeming Kowloon district.

Hong Kong announced in August it would further increase land supply and tighten mortgage lending on top of previous measures announced last year.

Home prices in the Chinese territory have surged nearly 45 percent from their trough at the end of 2008.

Mainland China's property prices rose at a slower pace in July, suggesting policy measures to cool the sector may be having an impact.

Beijing has tightened restrictions on advance sales of new developments, introduced curbs on loans for third home purchases and raised minimum down payments for second homes.

The measures will help prevent “drastic fluctuations” in the market, Agricultural Bank of China chairman Xiang Junbo said Monday.

Asian economies have outperformed their Western counterparts in recovering from the global slump that started in late 2008.

“In Asia in general, there are strong capital inflows because of the strong recovery in Asia and the disparate performances between the Western and Asian economies,” said Ho Woei Chen, an analyst with Singapore's United Overseas Bank.

Colin Tan, head of research and consultancy at Chesterton Suntec International in Singapore, said more cooling measures may be necessary.

“The liquidity problem is a global one. In Singapore, we are only starting to tackle this problem,” he wrote in local newspaper Today.

“Believe me, this is just the beginning.”

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