AsiaNow: A series of Special Reports by the Matthews Asian Funds' advisor, Matthews International Capital Management, LLC.

The Asian Dream

Asia’s residential real estate markets are modernizing–at varying paces–and becoming critical economic engines with important social ramifications.

In real estate, the saying goes, it’s all about “location, location, location.” In Asia, however, gaining perspective on real estate markets depends on where you look—it changes from location to location to location.

In China, home ownership is seen as a relatively new way to build wealth and security, initiated by the housing reforms and the end to government housing in the mid to late 1990s. Furthermore, with interest rates on household savings traditionally kept at artificially low levels by the authorities, and demand for housing high, real estate has been an attractive investment for many as property values have risen rapidly over the past decade.

Japanese, on the other hand, are more cautious of real estate as an investment—they’ve seen values drop as much as 80% from their peak in the late 1980s. This inertia in the housing market has had a dampening effect on the whole economy, as lower property prices resulted in less real estate-related investment activity and spending.

However, land prices have begun to rise in Japan’s largest cities. Because of this, households are waking up to the idea that real estate may not always be a losing proposition.

Download AsiaNow, Issue 1, 2008, The Real Estate Issue

PDF format, 2.9MB, 12Pages.

China: Housing the Growing Middle Class | The World's Tallest Buildings
Feng Shui and Property Values | Japan: Location, Location, Deflation
Korea: Taking a Chance on "Chonse" | Financing Asian Real Estate

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About The Advisor

Matthews International Capital Management, LLC, is the Investment Advisor to the Matthews Asian Funds.

Founded by G. Paul Matthews in 1991, Matthews International Capital Management, LLC is an independent management firm focused solely on investing in Asia.

Despite the inherent volatility of Asian markets, Matthews International Capital Management, LLC believes in the long-term prospects of the region, concentrating its efforts and expertise on the greater Asia Pacific region. With nearly $9 billion under management as of June 30, 2008, the firm specializes in actively managed, bottom-up portfolios, with a focus on long-term investment performance.

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