Singapore experienced a 9.5-per-cent, inflation-adjusted rise in the price of residential properties, the highest in Asia, during 2006, according to the survey by Global Property Guide, the biggest collection of residential-property price indices.

South Korea saw a real rise of 9.3 per cent, and the Philippines had a 9.1-per-cent real increase, while the price of residential property in Thailand fell 2.4 per cent last year.

The survey said Singapore's strong GDP growth rate of 7.9 per cent had pushed up the demand for property. The Urban Redevelop-ment Authority (URA) private residential property-price index rose by 10 per cent (9.5 per cent in real terms) in 2006.

South Korea also saw a strong rebound in property prices, despite continued efforts by the government to depress the market. The Kookmin Bank's house-price index was up 11.6 per cent in December 2006 (9.3 per cent in real terms) from a year earlier.

In the Philippines, strong economic growth and reduced inflation contributed to the continued recovery of the real-estate sector. In addition, demand from overseas Filipino workers and people with dual citizenship has been strong, pushing prices up. Luxury-condominium prices in the Philippines rose 15 per cent (9 per cent in real terms) last year, following an 11-per-cent nominal price rise in 2005, according to Colliers International.

Japan's residential-property market continued to fall in 2006, despite repeated attempts by the media to portray the market as rallying. Nevertheless, the residential urban land-price index registered a smaller fall in 2006 (-2.8 per cent) compared to the previous year (-4.7 per cent).

Hong Kong's property market turned negative (-2.13 per cent) last year, after impressive gains in 2004 (27 per cent) and 2005 (8 per cent). Higher interest rates in the US, mirrored directly in Hong Kong, were a major cause of the downturn.

Taiwan's messy political crisis seems to have frozen residential prices, with zero-per-cent appreciation during 2006. In real terms, Taiwan experienced a decline in house prices during 2006 (-1.7 per cent). During the three years prior to the second quarter of 2006, Taiwan's Sinyi house-price index rose 17 per cent. In Malaysia, house prices did not keep pace with inflation. Malay-sian house prices today are at the same level as in 1995 in real terms.

Thailand saw the end of its strong post-Asian-crisis property-market recovery as the political crisis impacted the economy. House prices moved up just 1.9 per cent in 2006 (-2.4 per cent in real terms), after 2005's price increase of 7 per cent (1.5 per cent in real terms) and 2004's rise of 9 per cent (6 per cent in real terms).

This year, elections will be held in South Korea, Taiwan, and the Philippines, and political uncertainty is likely to increase. There will also be elections in Japan and Hong Kong, but they are unlikely to have much impact on the real-estate market. In Thailand, uncertainty will increase if elections are not called.

Election years in the Philippines bring money inflows but also increase uncertainty. Yet if President Gloria Arroyo wins enough seats in Congress, she will push for a constitutional change, removing limits on foreign ownership of real estate and companies, moves which will be good for the realty market. In South Korea, the economic interventionism of left-of-centre President Roh Moo-hyun has been damaging for the housing market. His support is crumbling, and a less interventionist president may be elected in December, but even if the opposition Grand National Party wins, there is a long history of excessive government intervention in the housing market.