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Why Asian property investors may fear US taper

Despite the global downturn, countries such as Hong Kong and Singapore have seen sky-high property price rises, with Singaporean property prices souring around 60 percent in the past three years. Asia-Pacific's booming property markets are reliant on ultra-loose US monetary policy — and prices could plummet by up to 50 percent when the Federal Reserve starts tapering off its asset purchases, a senior economist warned CNBC. "The Asian housing market has become increasingly dependent on U.S. funding. So if there is one property market in the world where you find dependence on what happens next in the Federal Reserve it is a market like Hong Kong," said Steen Jakobsen, the chief economist and chief investment officer at Saxo Bank, who had just completed a week-long trip to Singapore, Indonesia and Hong Kong. Speculation has continued for months as to when the Fed might start scaling back its massive USD 85 billion-a-month bond-buying program, designed to aid the country's recovery since the subprime mortgage and global financial crises. European and Asian markets, as well as Wall Street, have tended to turn lower on any hints of pending tapering, such as when New York Fed President William Dudley expressed optimistic about the US recovery on Monday.
 Source: MoneyControl

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