Luxury residential property prices in Singapore and China are showing signs of stabilising after declining over the past six months, according to the latest index.

Meanwhile, luxury residential prices in Hong Kong rose a further 1.7% in the third quarter of the year with year to date price growth totalling 5.7%, the residential index from Jones Lang LaSalle also shows.

Across the nine luxury residential markets in Asia monitored by the firm, average capital values rose by 1.9% quarter on quarter compared with the 0.8% recorded in the second quarter of 2012.

The index also shows five out of nine monitored markets saw an increase in capital values during the quarter, while the remainder recorded minimal or no change.

Luxury residential prices in Singapore stabilised after correcting for two consecutive quarters, largely supported by end user demand.

Average prices also began to stabilise in China, helped by fewer price discounts from developers. Primary capital values for the high end market in Beijing rose by an average of 7.4%, although due mainly to larger units being launched, while capital values for luxury apartments in Shanghai were largely unchanged.

While Jakarta continues to outperform all monitored South East Asian markets with quarter on quarter price increases of 6.3%, average prices were flat in Manila and Kuala Lumpur and rose modestly in Bangkok.

The form says that a significant amount of new supply over the next one to two years is limiting upside potential in these markets.

The residential market in Hong Kong has been particularly strong this year, thanks to low interest rates and stronger buyer sentiment, according to Joseph Tsang, managing director and head of capital markets, Jones Lang LaSalle Hong Kong.

Hong Kongђs capital values are expected to see a mild correction over the short term after the government introduced buyers 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,Ғ he said.

Looking ahead, Jane Murray, head of research, Asia Pacific at Jones Lang LaSalle, predicts that policy restrictions in various markets, such as special and buyers stamp duty in Hong Kong and home purchase restrictions in China, should remain in place at least until 2014.

She said this has the potential to limit sales activity and further price increases despite low interest rates. ґCapital values of Singapores high end properties are expected to edge up modestly in the next twelve months, mainly supported by domestic buyers. Among the emerging South East Asia  markets, Jakarta will likely to see the strongest price growth for the next 12 months due to solid local demand,Ғ she added.

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