Rate of Growth Eases as Cooling Measures Take Hold
16 May, 2013, Hong Kong – While luxury home prices in Asia posted gains in Q1 2013, the rate of growth has moderated over the past two quarters as cooling measures across a number of markets take hold and are gradually dampening buyer sentiment. Among 13 major markets tracked, nine recorded modest price rises ranging from 0.7% to 3.0% q-o-q.
CBRE’s Luxury Residential Rental Index rose marginally, with slight rental increases found in Beijing, Shenzhen, Bangkok and Kuala Lumpur, unlike Singapore and New Delhi which were flat. The minor rental increase reflected a slight uptick in leasing demand from potential buyers.
Asia Luxury Residential Rental Index
Source: CBRE Research
Due to the constrained lending environment in China, India and Vietnam during the quarter, developers were forced to seek alternative sources of funding. Price growth was led by New Delhi and Mumbai, which saw gains between 2-4% q-o-q due to a lack of supply. Other strong performers included Manila and Kuala Lumpur where buying demand remained firm.
While price growth was also recorded in Beijing, Shanghai, Guangzhou and Shenzen, sales volume declined due to government cooling measures. Deal flow also slowed in Hong Kong and Singapore following an increase of stamp duty on all property transactions.
Asia Luxury Residential Price Index
Source: CBRE Research
“We expect demand from end-users and long-term investors to remain firm, but that buyer sentiment will continue to be dampened by government cooling measures,” Dr. Nick Axford, Executive Director and Head of CBRE Research, Asia Pacific commented. “Overall, prices look set to hold steady or easy slightly, but we are likely to see buyers taking longer to negotiate and conclude deals. The luxury residential leasing market is also expected to remain subdued.”
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