It's likely to remain flat in 2013.
According to Jones Lang LaSalle's Asia-wide residential index, average capital values rose by 1.1% q-o-q in 4Q12 across monitored luxury residential markets in Asia, slightly lower than the 1.9% q-o-q increase recorded in the previous quarter.
On a yearly basis, capital values were up 5.0% in aggregate (4.8% in 2011). Of the nine featured luxury residential markets, six saw an increase in capital values during the quarter, while the remainder recorded a decline or minimal change.
In China, average prices rose modestly by 1.2% q-o-q in Beijing (+3.3% y-o-y) and 0.3% q-o-q in Shanghai (–0.5% y-o-y), with most developers no longer offering price discounts on new projects.
In Hong Kong, new residential launches and secondary transactions both fell significantly after new tightening measures imposed last October, although luxury residential prices remained largely flat during 4Q (+5.0% y-o-y).
On the other hand, prices in Singapore’s luxury segment declined 0.8% q-o-q (–5.6% y-o-y), although prices in the more affordable typical segment were more buoyant.
Emerging SEA markets continued to see stable or increasing capital values. Jakarta (+6.5% q-o-q) again outperformed all monitored markets, supported by strong underlying fundamentals.
Average prices were flat in Kuala Lumpur and slightly higher in Bangkok and Manila during the quarter, as a significant amount of new supply over the next one to two years is limiting upside potential in these markets.
On an annual basis, Jakarta saw the strongest growth (+27.5% y-o-y) while other emerging SEA markets saw increases of between 3.3% and 6.9% for 2012.
Policy restrictions (e.g. HPR in China, extra stamp duties in Hong Kong, and higher stamp duties on home buyers in Singapore, starting January) should remain in place through 2013, thus potentially limiting sales activity and further price increases this year.
Supported by ongoing low interest rates, Hong Kong’s capital values are expected to see a mild rise in 2013, while capital values of Singapore’s high-end properties should remain largely flat.
Capital values in Shanghai should rise only marginally this year, although prices in in Beijing are likely to increase more on the back of stronger rental growth.
Among the emerging SEA markets, Jakarta should continue to outperform in 2013 due to strong rental growth and local investor interest.
More From Singapore Business Review