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Jakarta seeing strongest residential prices growth in Asia, index shows

Average capital values rose marginally by 0.2% in the fourth quarter of 2011, according to the latest Asia Pacific Residential index from Jones Lang LaSalle which tracks eight luxury residential markets in the region.

Beijing, Bangkok, Jakarta and Mumbai saw an increase in capital values during the quarter, prices remained stable in Singapore and Kuala Lumpur and declined in Hong Kong and Shanghai.

‘We expect a multi speed luxury residential market in the Asia Pacific region in 2012. We think prices in China will soften further, though developers are likely to introduce only moderate price discounts due to limited supply in prime locations,’ said Jane Murray, head of Asia Pacific Research at Jones Lang LaSalle.

‘Prices in Hong Kong and Singapore are expected to decline over the year due to projected rental correction, tighter credit and government measures. That said, generally low holding costs will limit the extent of price correction. Whilst prices in Kuala Lumpur and Bangkok are expected to stay flat, we anticipate Jakarta prices to be boosted by Indonesia’s strong economy,’ she added.

Overall Hong Kong prices edged down by 3.3% quarter on quarter due to tighter credit and weakening investor sentiment.

In Singapore average prices in the city state’s luxury prime market remained stable for the sixth consecutive quarter despite slight rental correction.

But in China with tightening policies remaining in place and falling sales volumes in the China Tier I markets, capital values for luxury apartments in Shanghai fell by 0.5% quarter on quarter while average prices in Beijing were largely flat.

Jakarta saw high end residential prices saw growth of over 14% over the full year of 2011 boosted by the country’s strong economic growth.