Residential capital values across Asia jumped 1.8 percent quarter-on-quarter in the fourth quarter of 2010, said Jones Lang LaSalle (JLL).
However, price growth has slowed down steadily from the 7.4 percent quarter-on-quarter pace seen in Q3 2009, as sales activity cooled, following the set of anti-speculative measures announced by several Asian governments last year.
Out of the eight featured luxury residential markets, five saw an increase in capital values in Q4, two saw stable capital values and Beijing posted a decline.
In contrast, five markets posted increases in capital values in the previous quarter, while three saw stable prices.
Despite the recent slew of government measures aimed at reining in speculative demand, Hong Kong’s luxury residential prices rose 6.4 percent quarter-on-quarter in Q4, due to continuing tight supply and rental growth.
Meanwhile, prices in Singapore’s luxury prime market stayed stable for the second straight quarter, as home buyers remained cautious, following the announcement of recent government tightening measures.
China Tier I markets saw quiet sales activity in Q4 due to various policy tightening measures, such as greater restrictions on mortgage loans for investors, while property developers had little incentive to lower prices. In Shanghai, luxury apartment capital values increased 0.3 percent quarter-on-quarter, while Beijing saw a 5.4 percent quarter-on-quarter decline in capital values.
“Government policy has become progressively tighter in China’s Tier 1 cities, in an effort to cool the residential markets. It’s interesting to see the price trends across Asia Pacific are largely similar in direction to China, if not as dramatic in magnitude,” said KK Fung, Managing Director of JLL Greater China.
“While the Hong Kong government has also been proactive in avoiding an asset bubble by placing more restrictions onto the residential sales market in the last few quarters, the city’s luxury residential properties continued to lead capital value growth across Asia Pacific through 2010, suggesting the strong underlying investment demand and market optimism there.”