From Savill’s Shanghai Q1 Property Market Review, June 13
Tighter liquidity – primarily caused through rising interest rates and lending quotas for the real estate market – has caused some developers to slow down expansion plans, and in some cases, sell off assets to finance ongoing operations. As certain developers slow their expansion, a lack of competition on new land plots has caused land prices to reach more moderate levels. Additionally, a number of recently developed projects were placed on the market as developers either needed capital and/or wanted to cash out in order to capitalize on low land prices.
While such a policy has complicated matters for some, for others, it’s been seen as an overall godsend. Cash-rich developers and investors have interpreted such conditions as a prime opportunity to seize hard assets and land at a bargain. They have bought out recently completed projects – primarily to satisfy short-term financial obligations – and entered into development projects on the back of reasonably priced land.
This mismatch in liquidity between different developers is expected to continue for the remainder of the year. The government does not seem to be easing off on restrictions any time soon, which is expected to cause further difficulties for some, while offering opportunities for others.
From Economic Conditions Snapshot: McKinsey Global Survey results, June 2011
Among executives in Asia’s developed countries, the share who expect an increase in customer demand has risen from 48% to 58% since March. Meanwhile, the share of executives who expect to decrease their workforces is up from 4% in March to 14% now. Both factors suggest why 68% of these executives expect a rise in profits in the second half of this year, compared with 63% globally. Furthermore, executives in Asia report slightly less appetite for capital investment than they did three months ago: 22% say their companies are postponing or deciding not to pursue capital investments, compared with 15% in March.
Though hiring expectations remain tepid globally, 37% of all respondents – and nearly half of respondents in China, India, and other developing markets – say their companies have had job openings they couldn’t fill for six months or more. Sixty-nine percent of all respondents say there are some positions for which it is particularly difficult to find qualified applicants. The positions most often cited as difficult to fill are managers and technical employees. The reasons for this differ: Executives in developed economies most often cite insufficient experience or too few applicants, while those in emerging economies cite high wage expectations and insufficient educational qualifications.