Thursday, May 16, 2013

Curbs hit Singapore, HK luxury home markets


The Business Times  |  14 May 2013
RECENT policies by the Singapore and Hong Kong governments to cool the growth of property prices in the first quarter of the year appear to have taken a toll on their luxury home markets, two separate reports noted yesterday.

RECENT policies by the Singapore and Hong Kong governments to cool the growth of property prices in the first quarter of the year appear to have taken a toll on their luxury home markets, two separate reports noted yesterday.


A Jones Lang LaSalle (JLL) report yesterday on the luxury residential market in the Asia Pacific for Q1 of 2013 showed that out of nine markets that it monitors, only Singapore and Hong Kong saw prices fall from the previous quarter.


Average capital values for Singapore high-end homes fell 0.6 per cent while those for Hong Kong fell 1.1 per cent. This compares with the 8.7 per cent gain by similar Jakarta properties and the 6 per cent growth for Kuala Lumpur luxury homes.


The declines were attributed to measures put in place to curb strong price growth.


Hong Kong imposed higher stamp duties and home loan curbs on property transactions in February. In Singapore, a seventh round of cooling measures since September 2009 was introduced in January that included higher additional buyer stamp duty rates and a tighter loan-to-value ratio.


Chua Yang Liang, head of research for Singapore and South East Asia at JLL, said of the Singapore market: "Policy (effects) coupled with slower population and economic growth are likely to continue to add downside pressure to capital values albeit moderately."


While a separate report from CBRE has the Singapore and Hong Kong luxury residences market doing slightly better, it made similar points about the impact of tighter regulations.


Transaction volumes fell in both markets after the latest curbs, despite a gain in prices, CBRE noted.


In its report, prices for Singapore luxury homes grew 1.8 per cent in Q1 from the previous quarter to about US$2,297 per square foot (psf), while for Hong Kong, prices edged up 0.9 per cent to some US$2,924 psf.


Singapore and Hong Kong were among nine of the 13 major markets that CBRE track for its Asia Luxury Residential Price Index to see price increases in that period.


Both real estate consultancies believe that South-east Asia economies will continue to outperform over the rest of the year, but noted an overhang of new or sustained policy restrictions for some of the markets in Asia, including China, on prices.


"Demand from end-users and long-term investors is expected to remain firm in the coming months but the cooling measures currently in place in many markets are already gradually dampening buyer sentiment," CBRE said, expecting overall prices to hold steady or ease over the next few quarters in Asia.


JLL's head of research for Asia Pacific, Jane Murray, said: "We expect high-end capital values in Hong Kong to fall by five to 10 per cent over the remainder of the year, and to decline by up to 5 per cent in Singapore."


Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C

Senior Sales Director
DTZ Property Network Pte Ltd (L3007960A)
Email: marshe_inc@yahoo.com.sg

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