Asia cities see mild price growth in posh-home segment

Seven of the nine markets featured in the firm’s residential index saw an increase in capital values, although five registered growth of less than 1 per cent. Jakarta and Beijing posted double-digit increases of 34.2 per cent and 18.7 per cent in the 12 months to the second quarter, with only Singapore reporting an annual decline of 2.1 per cent.
Jakarta continued to outperform all monitored markets in Asia, up 9 per cent from the first quarter, while average prices in Beijing rose solidly by 6.7 per cent because of several high-end projects coming to market during the period.
Despite tightening measures hurting sales activity, Hong Kong registered a marginal quarterly increase of 0.3 per cent.
Bangkok and Manila also saw slight increases in capital values, while prices in Kuala Lumpur remained flat.
Of the nine markets, only Singapore recorded a decline in the luxury residential sector of 0.6 per cent quarter on quarter, as government cooling measures continued to deflate investor sentiment.
“Jakarta’s market continues to move along well with a number of exciting new projects being launched in the quarter receiving excellent responses from buyers,” said Luke Rowe, the firm’s head of residential project marketing for Indonesia.
About 70 per cent of newly launched projects in Jakarta are selling off-plan across the market, with better-located developments enjoying even higher clearance rates. The limited existing supply of some 90,000 apartments coupled with the demand from a city with a metropolitan population of more than 20 million will ensure the high-end residential market remains buoyant for the remainder of the year.
Jane Murray, head of Asia-Pacific research, said that while the region’s luxury residential market had seen both quarterly and yearly growth, policy restrictions in Hong Kong, Singapore and mainland China were likely to remain in place for at least 12 months, dampening investor sentiment in these markets and constraining sales in line with the first half of the year.
“However, emerging Southeast Asian markets should continue to experience growth, although in markets such as Bangkok and Manila this may be moderate due to lower sales of new projects.
“We expect Jakarta to continue to outpace the rest of the region for the remainder of the year with strong price growth as a result of resilient domestic demand.”