When US consular officials in Mumbai bought a chunk of real estate for a new building in the city's then cheaper midtown area four years ago, they thought their troubles were finally over.

The location of their existing premises in exclusive but crowded south Mumbai meant they had to pay heavily to house staff within a reasonable commuting distance from the office.

What they did not count on, however, was Asia's great property boom.

Midtown land prices in India's financial capital began rising steeply and, with top-end rents doubling annually, the consulate faces the same problem even before its new offices are built.

"There are rental apartments which we had considered premium at Rs300,000 [$6,800] a month - these now go for Rs600,000," says Anjeli Hazari, a Mumbai estate agent catering to expatriates.

It's a very erratic, very volatile market." Across large parts of Asia, the same pattern is being repeated.

The rapid growth of the region's economies, led by China and India, is inflating property prices.

The trend has sent national regulators scrambling to try to put a lid on the market, in part by seeking to curb bank lending to the sector.

But few believe they will be able to achieve much more than a dampening of the worst excesses of a phenomenon some see running for years.

"We've got asset booms around the region and it's pretty much uniform. There are very few countries where you don't see it, whether it's in equities or in the property market," says Tim Condon, chief economist at ING in Singapore.

It is not just the parts of the region undergoing industrial development that are experiencing the surge.

Jones Lang LaSalle, the property consultancy, estimates that Tokyo prime office space rose 63 per cent in value last year while residential rental prices were up 28 per cent.

This provides further evidence that Japan is putting behind it the long period in the doldrums that followed the bursting of the country's 1980s asset bubble.

Japanese property stocks this month hit levels not seen since the 1980s and shares in Mitsui Fudosan, the leading developer, surpassed a lifetime high.

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Source: IndiaRealEstateblog