Asia’s luxury home prices to remain stable in 2011

Luxury residential prices in Asia will likely remain stable or see slower growth this year.

According to the latest Residential Index from Jones Lang LaSalle (JLL), average capital values climbed 1.8 percent quarter-on-quarter in Q1 this year, across monitored luxury residential markets in Asia, similar to the previous quarter.

However, price growth has moderated steadily from the 7.4 percent quarter-on-quarter pace recorded during the third quarter of 2009, as sales transactions cooled after the government’s series of anti-speculative measures from 2010 onwards.

Out of the eight featured luxury residential markets, five markets witnessed a growth in capital values in Q1, while prices remained unchanged in two cities and declined in Kuala Lumpur.

Despite the recent round of government measures to curb speculative demand, Hong Kong’s luxury residential prices grew robustly by 8.3 percent quarter-on-quarter in the first quarter, mainly due to the tight supply and sustained low holding costs.

Meanwhile, prices in Singapore’s luxury residential market remained unchanged for the third successive quarter, as home buyers became cautious after recent government cooling measures.

In the China Tier I markets, prices either rose or remained stable. Capital values of luxury apartments climbed marginally by 0.4 percent quarter-on-quarter in Shanghai but by a stronger 3.2 percent quarter-on-quarter in Beijing.

The growing pool of high net-worth individuals from mainland China will not only lead to a structural change in buyers’ profile in Hong Kong’s luxury residential market, but will also gradually raise demand for high-quality residential properties in other Asian cities, where the investment environment and social infrastructure are good,” said Joseph Tsang, Managing Director and Head of Capital Markets for Hong Kong at JLL.

Source : PropertyGuru – 9 May 2011

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