Asia Pacific’s luxury property market cooling off

Average capital values of eight luxury residential markets in the Asia Pacific region rose by only 0.2 percent in the fourth quarter, according to the latest Asia Pacific Residential Index released by Jones Lang LaSalle (JLL).

The property consultancy said Bangkok, Beijing, Mumbai and Jakarta recorded an increase in capital values during the period. Prices remained stable in Singapore and Kuala Lumpur while Shanghai and Hong Kong experienced a decline.

“We expect a multi-speed luxury residential market in the Asia Pacific region in 2012,” said Jane Murray, Head of Asia Pacific Research at JLL.

In Singapore, average prices in the luxury prime market remained stable for six consecutive quarters despite slight rental correction. Meanwhile, luxury home prices in Hong Kong declined 3.3 percent quarter-on-quarter, attributed mainly to tighter credit and weakening investor sentiment.

“Prices in Hong Kong and Singapore are expected to decline over the year due to projected rental correction, tighter credit and government measures; that said generally low holding costs will limit the extent of price correction,” said Murray.

“Whilst prices in Kuala Lumpur and Bangkok are expected to stay flat, we anticipate Jakarta prices to be boosted by Indonesia’s strong economy.”

With tightening policies remaining in place and declining sales volumes in the China Tier I markets, Shanghai’s capital values for luxury homes edged down 0.5 percent quarter-on-quarter while prices in Beijing were relatively flat.

Looking ahead, Chua Yang Liang, Head of Research, Singapore and South East Asia, said with the new set of government measures in place, “we can certainly expect the Residential Price Index to see some correction in 2012 especially for the luxury end market. “

“In contrast, mass market projects given the support from local buyers, could see some price moderation but to a lesser degree.”

Source : PropertyGuru – 2 Feb 2012

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