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Since the global financial crisis, central banks in many countries have adopted quantitative easing to reignite their domestic economies. Interest rates have fallen to record lows, while global inflation has dipped on the back of weaker growth and, since 2014, lower oil prices. Amid this low interest rate environment, real estate markets around the world have been flush with liquidity as banks have been keen to lend, non-traditional lenders have entered the debt markets, and investors have looked for yield. With global integration, little or no capital controls, and low bond and deposit rates, foreign and local investors have been attracted to real estate, driving up values in key cities around the world. The smaller investment size and the ease of entry and exit make residential property an attractive and obtainable investment for many. Home prices in Asia Pacific countries, including China, India, Taiwan, Malaysia, Australia, Hong Kong and Singapore, have risen sharply since 2009, in many cases exceeding local income growth. This has been a cause of concern among policymakers. For example, Hong Kong home prices are currently around double what they were in 2009; Shanghai prime capital values are around 60% higher; and Malaysian house prices rose some 80% over the seven-year period. Singapore private residential prices also rose strongly and are currently 45% above the low point in 2009. Fuelled by liquidity and low interest rates, home prices in Singapore surged 62% from 2009 to 2013 before moderating in the last three years due to the effects of cooling measures.

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