According to the latest residential index published by Jones Lang LaSalle, capital value growth of luxury residential properties throughout Asia are being topped by those of emerging South East Asian cities. Jakarta lead the way with a huge increase of 19.2 percent during the twelve months before the end of the second quarter this year.
“Jakarta has outperformed its neighbouring markets once again this quarter in the high-end residential sector. The market has been fuelled by strong wage and employment growth, low interest rates and high consumer confidence. We expect this upward trend to continue for the rest of the year, in line with projections that Jakarta will see the strongest price growth in the luxury residential space,” said Todd Lauchlan, head of Jones Lang LaSalle Indonesia.
Another emerging South East Asian city which registered a high increase over the last year up until the end of Q2 was Manila, with an increase of 10.5 percent.
“South East Asia (SEA), led by Indonesia and increasing the Philippines, is enjoying a growth spurt on the back of commodity demand and offshoring and outsourcing activities. How the SEA region would respond to the slowing global demand remains uncertain but the strong underlying domestic demand could mitigate this downside risk” said Dr Chua Yang Liang, Head of Research South East Asia.
In comparison, cities that have traditionally been considered powerhouses in the Asian property market have not been as successful, with high end residential prices in Hong Kong, Shanghai, Singapore and Beijing experiencing annual declines as high as 8 percent.
“Prices in China are expected to soften further in the second half of the year with policy restrictions likely to remain in place, although tight supply in prime locations will likely limit price discounts by developers. Rental correction, government policies and generally weaker investor sentiment should underpin further price declines in Singapore in the second half of year. On the other hand, Hong Kong prices are expected to stay relatively flat in the last half of the year because of tight supply and low holding costs.” said the company’s head of research for the Asia Pacific region, Dr Jane Murray.