Posh home prices dipped 0.6% in 1Q13

Government's cooling measures are to blame.

According to a release, in a steady start to the year, the first quarter of 2013 saw average capital values rise across seven of the nine luxury residential markets monitored in Jones Lang LaSalle’s Residential Index. Average capital values across the nine markets monitored were up 2.2 percent quarter on quarter and 6.1 percent year on year.

It noted that Indonesia continued to outperform all monitored markets with prices in Jakarta rising 8.7 percent from Q4 2012 and 32.9 percent on an annual basis. Prices in Kuala Lumpur (6.0 percent q-o-q) and Beijing (2.4 percent q-o-q) also rose solidly. Declines were registered only in Hong Kong (-1.1 percent q-o-q) and Singapore (-0.6 percent q-o-q) as tightening measures, implemented by governments on the back of previous strong price growth, came into effect.

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Commenting on the Hong Kong high end residential market, Joseph Tsang, Managing Director for Jones Lang LaSalle in Hong Kong said: “Unfortunately, with the current government continuing to adopt a heavy-handed approach in setting policy, volumes and prices are likely remain under downward pressure over the short term.”

Discussing the outlook for the rest of the year, Dr Jane Murray, Head of Research, Asia Pacific, Jones Lang LaSalle said: “In aggregate, the regional economy continues to outpace the rest of the world by a significant margin.

The emerging Southeast Asian economies should continue to outperform this year, and across the monitored residential markets Jakarta is expected to lead price growth, supported by continued investor interest.

However, policy restrictions in some markets will continue to limit price growth for the rest of the year, particularly in Hong Kong, China and Singapore. We expect high-end capital values in Hong Kong to fall by five to 10 percent over the remainder of the year, and to decline by up to five percent in
Singapore.

In mainland China, prices in Beijing are likely to continue to rise steadily throughout 2013, on the back of stronger rental growth, whilst we expect Shanghai prices to rise only marginally over the rest of the year.”