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Cooling measures take hold in major luxury residential markets in Asia

Jones Lang LaSalle releases latest Residential Index for Asia

SINGAPORE, 14 February 2013 – A flat fourth quarter closed a relatively stable year in luxury residential real estate in Asia in 2012, according to Jones Lang LaSalle’s latest Residential Index. The outlook for 2013 remains similarly neutral as cooling measures around the region take hold. 

Capital values rose an aggregated 5.0% in 2012, up from the 4.8% recorded in 2011. Of the nine featured luxury residential markets, six saw mild increases in capital values during the year, with declines registered only in Singapore (-5.6% y-o-y) and Shanghai (-0.5% y-o-y). Jakarta was the standout for the region, outperforming all monitored markets with growth rates of 27.5% on an annualised basis. 

Looking ahead, Dr Jane Murray, Head of Research, Asia Pacific, Jones Lang LaSalle said: “Steady sales activity and limited price growth in the short term is to be expected in 2013. Policy restrictions in markets such as Hong Kong, Singapore and China will constrain growth. Despite this, Hong Kong’s capital values are expected to see a mild rise in 2013 supported by ongoing low interest rates. Capital values in Shanghai should also rise marginally this year, while prices in Beijing are likely to increase further on the back of stronger rental growth. Among the emerging SEA markets, Jakarta should continue to outperform in 2013 due to strong underlying fundamentals.” 

Chris Fossick, Managing Director for Jones Lang LaSalle in Singapore and South East Asia said: “Prices in the luxury condominium residential market in Singapore have eased slightly over the past year as a result of cooling measures which have reduced the number of buyers. While the cooling measures will remain in place, it is unlikely that prices will rise. The medium to longer term outlook for the luxury condominium market however looks good as Singapore’s economy and population is expected to grow.”