Luxury residential property prices in Manila rose by a staggering 13.3 percent year-on-year ending December 2015, and by 1.5 percent in the previous three-month period.
Research from real estate firm JLL noted that during Q4 most monitored luxury residential markets in Asia-Pacific saw flat or small gains in prices, with a varied performance for sales across the region.
Of the eight featured markets, only Shanghai, Beijing and Manila saw price growth above 1 percent, while Singapore saw further declines.
Average monthly home sales in Hong Kong fell to an all-time quarterly low during the fourth quarter, and were 70 percent below the long-term monthly average. Ultra-luxury properties seemed less affected by faltering sentiment, and this segment supported capital values in the luxury market which continued to rise – but at a slower pace than during Q3.
Demand continued to soften in Singapore with sales volumes declining further in both the primary and secondary markets. Primary sales were more impacted in part due to fewer launches as developers were hesitant to release units amid sluggish market conditions. As a result, prices continued to trend lower.
An accommodative credit policy stance provided support for high-end sales volumes in China’s Tier 1 markets. On the back of strong sales in Shanghai, developers continued to raise sales prices with growth accelerating from the previous quarter. In Beijing, secondary capital values continued to rise but primary prices were under pressure as some developers offered small discounts in a bid to increase sales rates to meet year-end targets.
It was a varied performance in emerging Southeast Asia, with healthy sales activity persisting in Manila and Bangkok, while transaction volumes in Jakarta remained weak. Demand for luxury condominiums in Jakarta dropped off in Q2 with the implementation of new tax measures, and remained thin for the remainder of the year due to the tax changes as well as relatively slow economic growth and currency depreciation.
Capital values in Bangkok remained stable despite new projects launched in the quarter achieving good pre-sales rates.
Over the 12-months ending Q4 2015, Jakarta, Manila and Shanghai all recorded price growth in excess of 10 percent, while Singapore saw a decline of 7.8 percent.
JLL said that it expects a mixed performance for sales across the region during 2016.
Strong sales momentum should persist in Shanghai with developers expected to launch more units, while high prices at new projects should see volumes and new launches remain stable in Beijing.
Transaction volumes in Hong Kong are likely to remain low this year (similar to 2015) with further rate hikes and supply side pressures to weigh on sentiment, while buyer caution is expected to prevail in Singapore.
Mixed sales activity is expected across emerging Southeast Asia. Short-term demand in Jakarta is likely to be strongest in the lower-middle and middle segments where affordability is stronger and the tax burden is lower.
Strong buyer sentiment is expected to push up capital values in Shanghai while price appreciation in the high-end segment in Beijing will be more limited amid a slow sales rate. In Hong Kong, a sustained cycle of interest rate hikes coupled with supply side pressure should weigh on capital values, resulting in a small correction (up to 5 percent) during 2016.
Capital values in Singapore are expected to weaken further due to downside risks arising from a weak economy and prolonged government cooling measures.
Moderate price growth is forecast for most emerging Southeast Asia markets
JLL calculated its capital values on a net lettable area basis. Luxury residential properties include apartments, condominiums, detached and semi-detached housing that are located in traditional prime areas of the monitored city.
