Average property prices rise across most of Asia in first quarter of 2013

Average luxury property prices in Asia are continuing to increase with only Hong Kong and Singapore seeing values fall, according to the latest residential index from Jones Lang LaSalle.

The firms says that it has been a steady start to the year, and the first quarter of 2013 saw average capital values rise across seven of the nine luxury residential markets monitored by its index.

Average capital values across the nine markets monitored were up 2.2% quarter on quarter and 6.1% year on year.

Indonesia continued to outperform all monitored markets with prices in Jakarta rising 8.7% from the fourth quarter of 2012 and 32.9% on an annual basis. Prices in Kuala Lumpur were up 6% quarter on quarter and up 2.4% quarter on quarter in Beijing.

Declines were registered only in Hong Kong were values were down 1.1% quarter on quarter and 0.6% quarter on quarter in Singapore as tightening measures implemented by governments on the back of previous strong price growth, came into effect.
‘Unfortunately, with the current government continuing to adopt a heavy handed approach in setting policy, volumes and prices are likely remain under downward pressure over the short term,’ said Joseph Tsang, managing director for Jones Lang LaSalle in Hong Kong.

Discussing the outlook for the rest of the year, Jane Murray, head of research Asia Pacific at Jones Lang LaSalle said that the short term looks positive as the regional economy continues to outpace the rest of the world by a significant margin.
‘The emerging Southeast Asian economies should continue to outperform this year, and across the monitored residential markets Jakarta is expected to lead price growth, supported by continued investor interest,’ she pointed out.

‘However, policy restrictions in some markets will continue to limit price growth for the rest of the year, particularly in Hong Kong, China and Singapore. We expect high end capital values in Hong Kong to fall by five to 10% over the remainder of the year, and to decline by up to 5% in Singapore,’ she explained.

‘In mainland China, prices in Beijing are likely to continue to rise steadily throughout 2013, on the back of stronger rental growth, whilst we expect Shanghai prices to rise only marginally over the rest of the year,’ she added.