In the second quarter, Asia's luxury residential markets experienced a slowing of growth.

 

According to Jones Lang LaSalle's latest Residential Index, average capital values climbed only 1.6 percent quarter-over-quarter (q-o-q) in 2Q11 across tracked luxury residential markets in Asia, slowing from the 1.8 percent q-o-q pace seen the previous quarter. apartment for sale

 

While a result of continued tightening measures by various governments, price rise has slowed progressively from the 7.4% q-o-q rate achieved in 3Q09, as sales activity cooled in 2Q11, with fewer launches and sales recorded in most regions. The capital values of four of the eight featured luxury residential markets increased during the quarter, while prices stayed unchanged in three cities and fell in Beijing.

 

Despite the current round of government initiatives targeted at reducing speculative demand, luxury residential prices in Hong Kong increased by 7.3 percent year on year in 2Q11, owing to robust rental growth and restricted supply. Hong Kong had the best pricing performance among the studied markets in the 12 months to the end of 2Q11, with a 28 percent increase. Prices in Singapore's premium prime sector, on the other hand, remained unchanged for the fourth quarter in a row as purchasers remained cautious following recent government tightening measures. Despite lower sales volumes in China's Tier I markets, capital values for luxury flats in Shanghai remained practically stable, while average prices in Beijing declined by 1.9 percent year over year.

 

"As a result of the sustained low interest rate environment, progressive rental growth, and limited availability in the market, we saw a 7.3 percent increase in luxury residential prices in Hong Kong last quarter. Despite the drop in capital values in Beijing, we noticed a growing number of Mainland Chinese buyers in the luxury residential market "Managing Director and Head of Capital Markets, Hong Kong, Joseph Tsang.

 

Due to continued policy and interest rate issues, luxury home prices are expected to stay steady or expand at a slower pace in 2011. Prices in China are predicted to be stable or slightly lower for the rest of the year, as developers are expected to offer further discounts and debut lower-cost devices over the next 12 months. Prices in Hong Kong and Singapore are expected to stay relatively constant in the second half of 2011, owing to strong demand from end-users and long-term investors.

 

Jacqueline Wong, Head of Home for Jones Lang LaSalle Singapore, says of Singapore: "Despite the low interest rate environment, the Singapore luxury residential market is projected to maintain its capital values. This could be the result of a successful government intervention in tightening measures, as well as a persistently cautious global economic outlook. While developers are not actively raising selling prices, they are also resisting deflating asking prices, as they have built up enough holding muscle during the last few years of excellent performance."

 

Ms. Wong continues, "While Singapore is quickly establishing itself as a desirable global city to live in, more long-term high-net-worth investors are adding Singaporean real estate to their portfolios. This type of investor has helped to keep capital values stable and out of the hands of speculators."