As government measures dent demand for home buying activity, prime property markets across the Asia Pacific region are unlikely to outperform the other regions of the world in 2013, according to Knight Frank.
Cooling measures that aim to regulate housing prices and prevent a property bubble are taking a toll, said Nicholas Holt, Research Director for the region at Knight Frank.
“These cooling measures have dented demand for prime residential product in some markets, through limiting financing, introducing extra taxes for foreign buyers and penalties for disposing of the property within a certain time period.”
Many of the curbs have targeted the luxury residential segment. For instance, the loan- to-value (LTV) ratio in Hong Kong has been capped at 50 percent for houses worth more than HK$10 million (S$1.58 million). Although the regulations penalise multiple homeownership, they also affect first-time buyers.
“At the same time that the market has become more difficult for some buyers, the attraction of prime property markets outside their domestic markets has continued to provide incentives to move their money abroad,” Holt noted.
“With an increasingly mobile, educated and well travelled class of property owners in the Asian region, the lifestyle choice of having a second home abroad, for personal or for children’s educational use is proving to be one of the key narratives for high net-worth (HNW) Asian buyers.”
Moving forward, prices of prime properties across the region are expected to be fairly subdued through 2013 given the protectionist measures implemented over the past year, he added.
Romesh Navaratnarajah, Senior Editor of PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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