Asia’s charge in luxury residential capital value growth is buoyed by emerging South East Asian cities, according to Jones Lang LaSalle’s (JLL) latest Residential Index.
Over the past year ended-Q2, Jakarta and Manila’s indices posted double digit growth of 19.2 and 10.5 percent respectively.
Dr. Chua Yang Liang, Head of Research for South East Asia at JLL, said: “South East Asia (SEA), led by Indonesia and increasingly the Philippines, is enjoying a growth spurt on the back of commodity demand and offshoring and outsourcing activities.”
However, Shanghai, Beijing, Hong Kong and Singapore saw annual price declines of up to eight percent for high-end residential properties.
Chua noted that the region’s future response to slowing global demand is still uncertain, “but the strong underlying domestic demand could mitigate this downside risk”.
Despite this, the report noted that average capital values among monitored residential markets in Asia remains largely stable with 0.8 percent quarter-on-quarter growth.
It also highlighted that prices in Singapore slid 2.9 percent quarter-on-quarter amid the property cooling measures and falling rentals.
Moving forward, Dr. Jane Murray, Head of Research, Asia Pacific at JLL, noted that Singapore’s government policies, generally weaker investor sentiment and rental correction “should underpin further price declines in Singapore in the second half of 2012”.
Meanwhile, Chua stated that Singapore’s residential leasing market will likely face more downside pressure as it “remains at the cusp of this shift and given cost savings as the modus operandi for most firms together with tighter immigration”.
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