Luxury residential property prices in Manila saw the highest quarter-on-quarter and year-on-year rise anywhere in the Asia-Pacific region, according to new research from real estate firm JLL.
In the second quarter of 2015, most luxury residential markets in Asia-Pacific saw flat or small gains in prices amid improving sales activity in most markets. Of the eight featured markets, only Jakarta, Manila and Shanghai saw price growth above 1 percent, while Singapore saw further declines.
The strongest price gains were seen in Manila, Jakarta and Shanghai, the firm reported.
In Hong Kong, the positive wealth effect arising from the stock market rally in early April spurred demand for luxury properties. Boosted by high prices achieved in the primary sales market, capital values rose by 1.7 percent q-o-q.
Sales volumes in Singapore rose but remained lacklustre, and new project launches were limited. The ongoing impact of government cooling measures and caution about the economic outlook in the city-state contributed to a further decline in capital values.
In China, supportive policy measures (such as its policy rate cut) improved buying sentiment and saw sales transactions rise in the high-end market segment in Beijing and Shanghai. With some developers raising selling prices amid improved optimism, capital values in Shanghai recorded a small increase (+2.7 percent versus +1.2 percent q-o-q in the previous quarter).
Sales volumes in Beijing’s primary market rose and pushed primary market prices higher, however, capital values in the secondary market remained stable owing to subdued activity as available stock was limited.
In emerging Southeast Asia, Manila witnessed the strongest price growth underpinned by sustained interest from local buyers.
Luxury residential properties include apartments, condominiums, detached and semi-detached housing that are located in traditional prime areas
In Bangkok, capital values held firm as healthy demand for newly launched condominium projects persisted.
In conclusion, the real estate first said it expects to see stable or slightly stronger sales activity in most markets in the second half of 2015. An accommodative policy stance in China should continue to support sales volumes, while improved confidence of developers is likely to see more new launches.
Sales volumes in Hong Kong are likely to moderate as an expectation of rising interest rates has an impact on buyer sentiment, while Singapore is likely to continue to see subdued volumes. Healthy sales activity is expected in most emerging Southeast Asian markets, although sales are likely to remain low in Jakarta as potential buyers continue to display caution on the back of the new tax regulation where the threshold for 5 percent super luxury tax was lowered from IDR 10 billion to IDR 5 billion in 2Q.
Moderate price growth is expected in China, driven by improving sales momentum. Hong Kong’s luxury residential prices, while still forecast to grow by up to 5 percent in 2015, will likely face growing downward pressure on the back of a greater number of new project launches.
Ongoing weakness in Singapore’s residential market should see capital values correct further, while moderate growth is forecast for most emerging regional markets, in part due to new condominiums commanding higher prices.
