Luxury residential prices seen to decline over the year

But average prices in Singapore remained stable for the sixth consecutive quarter despite slight rental correction.

According to a release, Jones Lang LaSalle’s latest Asia Pacific Residential Index, which tracks eight luxury residential markets in the region, found that average capital values rose marginally by 0.2 percent in quarter four 2011, compared to the previous quarter. Beijing, Bangkok, Jakarta and Mumbai saw an increase in capital values during the quarter, prices remained stable in Singapore and Kuala Lumpur and declined in Hong Kong and Shanghai.

Looking ahead, Jane Murray, Head of Asia Pacific Research at Jones Lang LaSalle said: “We expect a multi-speed luxury residential market in the Asia Pacific region in 2012. We think prices in China will soften further, though developers are likely to introduce only moderate price discounts due to limited supply in prime locations.

Prices in Hong Kong and Singapore are expected to decline over the year due to projected rental correction, tighter credit and government measures; that said generally low holding costs will limit the extent of price correction. Whilst prices in Kuala Lumpur and Bangkok are expected to stay flat, we anticipate Jakarta prices to be boosted by Indonesia’s strong economy.”

Key highlights of Q4 2011:

Hong Kong - prices edged down by 3.3 percent quarter-on-quarter in 4Q 2011, due to tighter credit and weakening investor sentiment.

Singapore - average prices in the city state’s luxury prime market remained stable for the sixth consecutive quarter despite slight rental correction.

China - with tightening policies remaining in place and falling sales volumes in the China Tier I markets, capital values for luxury apartments in Shanghai fell by 0.5% q-o-q, while average prices in Beijing were largely flat.

Jakarta – high end residential prices saw growth of over 14 percent over the full year 2011 boosted by the country’s strong economic growth

Dr Yang Liang Chua Head of Research Singapore and South East Asia says. “With the new set of government measures in place, we can certainly expect the Residential Price Index to see some correction in 2012 especially for the luxury end market. In contrast, mass market projects given the support from local buyers, could see some price moderation but to a lesser degree.”

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