The luxury real estate market in Asia is flat with one exception: Jakarta. A newly published study by Jones Lang LaSalle shows that capital values for prime properties grew by 0.2% in the last quarter of 2011 compared to the previous quarter, while sale volumes contracted across the region.
However, Jakarta bucked the stability trend with increases of 3.7 percent over the previous quarter and 14.4 percent over 2010 to become Asia’s top performer.
Price rise in Jakarta's prime property market
By contrast, Hong Kong saw the sharpest decline in prime property values, with a 3.3 percent reduction over the third quarter of 2011, which Jones Lang LaSalle analysts attribute to tighter access to credit and weakening sentiment among buyers. Nonetheless, prices in the city remain 11.7 percent higher than at the end of 2010—the second strongest performance in the region.
The luxury real estate market in Shanghai also saw a small dip in the fourth quarter of 2011 and a 1 percent drop from the previous year, while Bejing was virtually flat quarter on quarter, although it experienced a 2.2 percent decline over 2010.
Singapore took the palm for stability—prices for luxury real estate remained steady for the sixth consecutive quarter.
Looking ahead, Jones Lang Lasalle expect prime property values to soften further in China and Hong Kong and start dipping in Singapore, where rents have begun correcting.
The Jakarta market, on the other hand, should continue growing on the back of a strong economy.
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