Jakarta and Beijing see strongest growth in luxury residential markets


Similar to the first quarter, the second quarter of 2013 saw limited price growth in most monitored luxury residential markets in Asia, according to the latest Jones Lang LaSalle Residential Index. 

Seven of the nine featured markets saw an increase in capital values during the quarter, although five registered growth of less than 1 percent.  Jakarta and Beijing registered double digit increases of 34.2 percent and 18.7 percent respectively in the 12 months to end-Q2, with only Singapore reporting an annual decline at 2.1 percent.

Jakarta, capital of Indonesia, registered 34.2 percent growth in its luxury residential market during the second quarter of 2013. (Photo Wikipedia commons/Gunawan Kartapranata)Jakarta, capital of Indonesia, registered 34.2 percent growth in its luxury residential market during the second quarter of 2013. (Photo Wikipedia commons/Gunawan Kartapranata)

Jakarta continued to outperform all monitored markets in Asia, up 9 percent from Q1 2013, while average prices in Beijing also rose solidly (6.7 percent q-o-q) due to several high-end projects coming to market during the quarter.  Despite restrictive tightening measures affecting sales activity, Hong Kong registered a marginal quarterly increase of 0.3 percent on Q1 2013.

Bangkok and Manila also saw slight increases in capital values over the quarter, while prices in Kuala Lumpur remained flat.

Of the nine markets, only Singapore recorded a decline in the luxury residential sector, down 0.6 percent quarter on quarter, as government cooling measures continued to affect investor sentiment.

Commenting on the Jakarta’s high-end residential market, Luke Rowe, Head of Residential Project Marketing, Indonesia said: “Jakarta’s market continues to move along well with a number of exciting new projects being launched in the quarter receiving excellent responses from buyers.  70 percent of newly launched projects are selling off-plan across the market with better located developments enjoying even higher clearance rates.

“The limited existing supply of approximately 90,000 apartments coupled with the demand from a city with a population of over 20 million, will ensure the high-end residential market remains buoyant for the remainder of the year.”

Looking ahead to the remainder of the year, Dr Jane Murray, Head of Research, Asia Pacific, Jones Lang LaSalle said: “While the region’s luxury residential market has seen both quarterly and yearly growth, policy restrictions in Hong Kong, Singapore and China are likely to remain in place for at least another 12 months, affecting investor sentiment in these markets and constraining sales activity in line with the first half of the year.  However, emerging Southeast Asian markets should continue to experience growth, although in markets such as Bangkok and Manila this may be moderate due to lower sales of new projects.

“We expect Jakarta to continue to outpace the rest of the region for the remainder of the year with strong price growth as a result of resilient domestic demand.”

(Source: Jones Lang LaSalle)