While eight key markets in the Asia Pacific recorded a decent one percent increase in high-end residential prices during the first quarter, Singapore saw a quarter-on-quarter drop in luxury home prices after remaining stable for six consecutive quarters on the back of on-going rental adjustment.
According to the latest residential index released by Jones Lang LaSalle (JLL), prices of high-end residential properties in Kuala Lumpur, Hong Kong, Jakarta and Bangkok showed increases while Singapore, Shanghai and Beijing saw declines.
The index indicated that capital values for Kuala Lumpur grew 6.9 percent in Q1 due to additional stocks, while Hong Kong and Jakarta edged up 1.4 and 4.3 percent respectively.
“The first quarter increase is a continuation of a trend we have witnessed over the last 18-24 months in the Indonesian residential market, where price increases have been consistently pushed through by developers on the strength of robust demand levels,” said Todd Lauchlan, Country Head at JLL Indonesia.
Meanwhile, average prices of high-end homes in Singapore slipped two percent in the first quarter, mainly attributed to the additional stamp duty (ABSD) imposed on foreign buyers in early December 2011. Capital values for luxury units in Shanghai declined 1.2 percent quarter-on-quarter while Beijing saw prices plunge 2.3 percent, “as tightening policies remain in place and sales volumes are down in the China Tier I markets”.
“Prices in China are expected to decline further over the next 12 months, as policy restrictions are likely to remain in place and developers are likely to introduce more price discounts,” said Dr Jane Murray, Head of Research for Asia Pacific at JLL.
“Prices in Hong Kong and Singapore are also expected to decline over 2012, as a result of projected rental correction, generally weaker investor sentiment as well as policy risks.”
Dr Chua Yang Liang, Head of Research for Singapore and Southeast Asia at JLL, added that while Singapore’s luxury home market remains weak due to the ABSD imposed last year, “mass market activity remains particularly upbeat in the primary market”.
“This divergence is unlikely to sustain for long as the genuine occupier demand, as measured by the sales activity level in the secondary market, is pale in comparison to the primary.”
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