Friday, December 07, 2012

S'pore luxury home prices stabilise

Prices of upmarket homes in Singapore and China have now stabilised after a six-month decline, according to Jones Lang LaSalle’s (JLL) Q3 Residential Index.

Buying interest helped to stabilise luxury home prices in Singapore, which picked up from correcting the last two consecutive quarters.

Meanwhile, China saw fewer price discounts from developers. Primary capital values for Beijing luxury homes rose 7.4 percent on average while Shanghai’s capital values were mainly unchanged.

Average capital values across nine monitored Asian markets rose 1.9 percent quarter-on-quarter in Q3, compared with a 0.8 percent quarter-on-quarter gain in the previous period. In Hong Kong, luxury home prices inched up 1.7 percent during the period.

“The residential market in Hong Kong has been particularly strong this year, thanks to low interest rates and stronger buyer sentiment. Hong Kong’s capital values are expected to see a mild correction over the short term after the government introduced buyer’s stamp duty on foreign and corporate buyers in late October. However, any further downside risk should be limited by tight supply and low holding costs,” said Joseph Tsang, Managing Director and Head of Capital Markets at JLL Hong Kong.

Meanwhile, five of nine monitored markets recorded an uptick in capital values, while others remained flat or saw minimal change.

Dr. Jane Murray, JLL’s Head of Research, Asia Pacific, said: “Policy restrictions in various markets – such as special and buyer’s stamp duty in Hong Kong and Home Purchase Restrictions in China – should remain in place at least until 2014, thus potentially limiting sales activity and further price increases, despite low interest rates.”

In Singapore, luxury capital values will likely grow modestly over the next year, “mainly supported by domestic buyers”.

Jakarta is also set to show the strongest price growth due to robust domestic demand, added Murray.

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