Asian Property Market Effectively Cooled

Cooling measures employed in several Asian residential real estate markets are starting to take effect, according to reports on the nine leading luxury markets in the region by …

Cooling measures employed in several Asian residential real estate markets are starting to take effect, according to reports on the nine leading luxury markets in the region by Jones Lang LaSalle. Values continued to rise in most markets and particularly in Jakarta, but some areas are now experiencing declines. Singapore saw growth decrease 5.6% and Shanghai dropped 0.5% at the close of 2012, although Hong Kong and Beijing markets remained unfazed. Meanwhile, Mumbai, Manila, Kuala Lumpur and Bangkok all saw moderate increases despite cooling measures. For more on this continue reading the following article from Property Wire.

Cooling measures are taking hold in major luxury residential markets in Asia and as a result the outlook for 2013 is looking flat, according to the latest quarterly report from Jones Lang LaSalle.

Its latest Asia market report says that a flat fourth quarter at the end of 2012 closed a relatively stable year in luxury residential real estate in the region.

Capital values rose an aggregated 5% 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 while Jakarta saw a major surge, outperforming all monitored markets with growth rates of 27.5% on an annualised basis.
On the down side growth fell by 5.6% in Singapore year on year where a number of cooling measures were introduced by the government to cool the market, particularly overseas buyers and second home owners.

Growth was also down 0.5% in Shanghai where again government imposed cooling measures are seen to be taking effect. But these did not affect the markets in Beijing and Hong Kong so mjuch where annual growth increased by 3.3% and 5% respectively.

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Elsewhere in the region Bangkok saw growth increase by 3.5%, Kuala Lumpur by 6.9%, Manila by 3.3% and Mumbai by 3.2%.

But the figures for the last quarter of 2012 show that growth has slowed in recent months, suggesting that cooling measures are now biting. On a quarterly basis growth in Singapore fell 0.8% and was down 0.1% in Hong Kong. It remained static in Kuala Lumpur and grew by just 0.3% in Shanghai and by 0.6% in Bangkok.

Other markets saw quarterly growth but well below the annual figures. Growth was 1% in Mumbai, 1.1% in Manila, and 1.2% in Beijing. While Jakarta saw quarterly grown of 6.5% this is well below the annual figure of 27.5%.

Looking ahead, Jane Murray, head of research for Asia Pacific at Jones Lang LaSalle said that 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,’ she explained.

‘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 markets, Jakarta should continue to outperform in 2013 due to strong underlying fundamentals,’ she added.

Where the cooling measures remain in place it is unlikely that prices will rise in the short term, according to Chris Fossick, managing director for Jones Lang LaSalle in Singapore and South East Asia.

‘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,’ he said.

‘The medium to longer term outlook for the luxury condominium market however looks good as Singapore’s economy and population is expected to grow,’ he added.

This article was republished with permission from Property Wire.


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