After declining over the past six months, prices of Asia’s luxury residences showed signs of stabilisation, according to the latest Residential Index from estate agent Jones Lang LaSalle (JLL).
Across the nine Asian luxury residential markets monitored by JLL, average capital values rose by 1.9% quarter-on-quarter (q-o-q) in Q3, compared with the 0.8% q-o-q increase recorded in Q2.
According to the index, Singapore’s market stabilised after correcting for two consecutive quarters, which is largely supported by end-user demand. China’s market, on the other hand, stabilised with the help of fewer price discounts from developers. Specifically, Beijing’s luxury segment rose by an average of 7.4%, mainly due to larger units being launched, while Shanghai’s remained largely unchanged q-o-q.
In South-East Asia, Jakarta continues to outperform all monitored markets, with a q-o-q price increase of 6.3%, whereas average prices remained flat in Manila and Kuala Lumpur, and rose modestly in Bangkok. According to JLL, this trend may continue in South-East Asia over the next two years, as a huge amount of new supply will be turned over, thus limiting the growth potential in these markets.
Summing up, Jane Murray, JLL Asia–Pacific’s head of research, said policy restrictions in various markets, such as special and buyer’s stamp duty in Hong Kong home purchase restrictions in China, will remain in place at least until 2014. This will potentially limit the sales activity further price increases in these markets, despite low interest rates.
Murray added that capital values of Singapore’s high-end properties are expected to edge up modestly in the next 12 months, mainly supported by domestic buyers. ‘Jakarta is also to likely see the strongest price growth for the next 12 months due to solid local demand.’