Urbanisation and REITs behind growth of Asian property

Urban development and real estate investment trusts (REITs) will be the driving factors behind the growth of the Asian property market, according to a new report.

The 2006 Asia property review by credit ratings organisation Standard and Poor’s (S&P) has suggested that the urban populations of Asian countries are set to expand over the coming years, as migration to these newly established areas takes place.

This will consequently lead to a boom in the demand for housing in these populated areas.

In China, for example, inhabitants of urban areas currently account for 40 per cent of the total population of the country – a rate much lower than that seen in other developed countries.

Another aspect of growth that could prove interesting for overseas property investors is the development of the REIT market – which provides a vehicle for smaller investors to combine their funds with other financers.

The REIT market has already seen significant growth in Japan, Singapore and Malaysia and is beginning to develop in Taiwan, Thailand and Hong Kong, according to MediaCorp news.

It was predicted in the Asia property review that investment in the area would continue to be popular throughout 2006 and 2007 on the basis of strong economic growth.

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