Emerging South East Asian cities are leading the charge in luxury residential capital value growth across Asia, according to the latest Residential Index from Jones Lang LaSalle. Jakarta and Manila real estate market registered double digit increases of 19.2 per cent and 10.5 per cent respectively in the last 12 months. Jakarta outperformed all monitored markets in Asia, supported by strong underlying fundamentals.
Jones Lang LaSalle said the city is set to see the strongest price growth for the rest of the year due to solid local demand.
“Jakarta real estate has outperformed its neighbouring markets once again this quarter in the high-end residential sector. The market has been fuelled by strong wage and employment growth, low interest rates and high consumer confidence. We expect this upward trend to continue for the rest of the year, in line with projections that Jakarta will see the strongest price growth in the luxury residential space,” said Todd Lauchlan, country head, Jones Lang LaSalle Indonesia.
Meanwhile, Hong Kong, Singapore, Shanghai and Beijing have seen annual declines in high-end residential prices of up to 8 per cent. In Hong Kong, Jones Lang LaSalle said luxury residential prices edged up 2.0 per cent during the quarter due to more active mortgage lending by banks and improved market sentiment.
However, in Singapore, prices dipped 2.9 per cent quarter-on-quarter on the back of ongoing rental declines and property cooling measures.Likewise, prices in Beijing fell 2.7 percent due to tightening policies in place and some price discounts by developers. Meanwhile, Shanghai saw a marginal increase of 0.3 percent for the quarter.
Jones Lang LaSalle said luxury residential markets that it monitored across Asia as a whole, saw their average capital values remaining largely stable with an increase of 0.8 per cent quarter-on-quarter in the second quarter. This is similar to the 1.1 per cent quarter-on-quarter increase recorded in the previous quarter.
Moving forward, Jones Lang LaSalle expects prices to further soften or remain flat in Asia. “Prices in China are expected to soften further in the second half of the year with policy restrictions likely to remain in place, although tight supply in prime locations will likely limit price discounts by developers. Rental correction, government policies and generally weaker investor sentiment should underpin further price declines in Singapore in the second half of the year. On the other hand, Hong Kong prices are expected to stay relatively flat in the last half of the year because of tight supply and low holding costs,” said Dr Jane Murray, head of research, Asia Pacific, Jones Lang LaSalle.