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News Release

Bangkok

Capital values of luxury residential real estate in most Asian cities register mild increases

​Jones Lang LaSalle releases latest Residential Index for Asia


The average capital value in Asian luxury residential markets rose an aggregated 5.0% in 2012, up from the 4.8% recorded in 2011, according to Jones Lang LaSalle’s latest Residential Index. The index monitors luxury residential markets in 9 Asian cities including Bangkok. Beijing, Hong Kong, Jakarta, Kuala Lumpur, Manila, Mumbai, Shanghai and Singapore.

Of the nine featured luxury residential markets, six saw mild increases in capital values during the year. These included Kuala Lumpur (6.9%), Hong Kong (5%), Bangkok (3.5%), Manila (3.3%), Beijing (3.3%), and Mumbai (3.2%). Jakarta was the standout for the region, outperforming all monitored markets with growth rates of 27.5% on an annualised basis. Declines were registered only in Singapore (-5.6%) and Shanghai (-0.5%).
 
Suphin Mechuchep, Managing Director of Jones Lang LaSalle in Thailand, said “Prices of high end condominiums in both completed buildings and off-plan projects in Bangkok’s central business district (CBD) continue to grow. The price growth has been driven mainly by sustained demand from Thai buyers and rising development costs.”
City Yearly Change 4Q12 vs 4Q11
(Local Currency)
Jakarta ​27.5%
​Kuala Lumpur ​6.9%
​Hong Kong ​5%
​Bangkok ​3.5%
​Manila ​3.3%
​Beijing ​3.3%
​Mumbai ​3.2%
​Shanghai ​-0.5%
​Singapore ​-5.6%
 
Source: Jones Lang LaSalle Residential Index
 
“In the aftermath of global financial crisis, demand of overseas buyers, particularly from the US and Europe, dropped significantly. Consequently, new launches in the Bangkok luxury condominium market slowed down. At the same time, the slowdown in new launches allowed the supply under construction to be absorbed by the market, which has been dominated by high net worth Thais. Sales rates for the new wave of supply completing this year are still solid, which will attract more new high end development,’” said Suphin.
 
“We believe prices of new condominium development will continue to edge upward, mainly due to higher development costs, including land which is becoming scarcer to find in central Bangkok. In addition, new projects tend to offer higher quality products in terms of both design and construction, which will contribute to higher prices,” she added.
 
Chris Fossick, Managing Director for Jones Lang LaSalle in Singapore and South East Asia said: “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. While the cooling measures will remain in place, it is unlikely that prices will rise. The medium to longer term outlook for the luxury condominium market however looks good as Singapore’s economy and population is expected to grow.”
 
Looking ahead, Dr Jane Murray, Head of Research, Asia Pacific, Jones Lang LaSalle said: “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. 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 SEA markets, Jakarta should continue to outperform in 2013 due to strong underlying fundamentals.”
 
Notes to editors
 
• The Jones Lang LaSalle Residential Index tracks the capital value performance of high-end residential stock across nine featured markets in Asia.
• Capital values are on a net lettable area basis.
• Luxury residential properties include apartments, condominiums, detached and semi-detached housing that are located in traditional prime areas.