Capital values of luxury residential assets in Asia-Pacific declined in the third quarter of 2013, particularly for financial hubs Hong Kong and Singapore which seemed to have lost their lustre in favour of Beijing and Shanghai, the latest Residential Index by Jones Lang LaSalle shows.

Capital values of luxury residential assets in Asia-Pacific declined in the third quarter of 2013, particularly for financial hubs Hong Kong and Singapore which seemed to have lost their lustre in favour of Beijing and Shanghai, the latest Residential Index by Jones Lang LaSalle shows.

Hong Kong and Singapore registered price declines in the last 12 months, while the rest of the Asia-Pacific markets saw growth that ranged from 2.4 per cent of 6 per cent. Of the nine monitored markets, Singapore saw the largest quarterly and annual declines, dropping 0.4 per cent and 2.5 per cent, respectively, as tightening regulations on bank credit affected investor sentiment. In Hong Kong, luxury residential prices saw a drop of 0.3 per cent as sales volumes suffered from "buyer caution."

On the other hand, Beijing saw a 1.6 per cent rise in luxury home prices in the quarter, while Shanghai enjoyed a 1.5 per cent increase. According to JLL, these are a result of fewer projects coming to market. Healthy sales activity, coupled with strong local demand, also saw Manila outperform its South East Asian peers, recording a growth of 0.8 per cent in the quarter.

Jakarta, while delivering flat growth in the third quarter, reported the highest increase versus Q3 2012 at 26.2 per cent. Beijing followed with a 14.1 per cent rise year-on-year. Hong Kong and Singapore still posted declines of 1.2 per cent and 2.5 per cent, respectively. 

"Buying demand for luxury residential properties remains weak. Although prices have generally been holding up in the secondary market, we are starting to see signs of discounting in the primary market and expect prices to remain under pressure over the last quarter of the year and into 2014," commented Joseph Tsang, managing director for Jones Lang LaSalle in Hong Kong. 

The study defines luxury residential properties as apartments, condominiums, detached and semi-detached housing located in traditional prime areas.