Property markets in Hong Kong and Singapore have turned red hot in recent times pushing buyers out of the market and raising fears of a bubble. But research from real estate services firm Jones Lang LaSalle suggests some of this heat could be coming off.
According to Jones Lang LaSalle's Residential Index - which measures luxury residential markets across Asia - Hong Kong and Singapore were the only two out of nine profiled markets which saw prices come down. Hong Kong's luxury property prices fell 1.1 percent quarter on quarter over January to March, while Singapore came down 0.6 percent.
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Jones Lang LaSalle's Residential Index monitors luxury apartments, condominiums, detached and semi-detached housing located in prime areas. Analysts say the luxury residential market offers a good indicator of the mass property market as all sub-sectors tend to move in tandem.
Other data have also shown that prices are cooling in these two countries. Data from Singapore's Urban Redevelopment Authority showed that private property prices in the first three months of 2013 rose only 0.5 percent in contrast to a 1.8 percent rise in the final quarter of last year.
Meanwhile in Hong Kong, the monthly Centa-City Leading (CCL) index, an index compiled by the City University of Hong Kong and real estate services firm Centaline Property, showed that although property prices soared at the start of the year, rising 6.8 percent from January to mid-March, they have since pulled back rising 4.2 percent from Mid-March to date.
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The reduction in prices could be a result of steps taken by the respective governments' to cool overheating in these markets.
Singapore announced its seventh round of property measures in January including increased taxes for foreigners and corporates buying residential properties, while Hong Kong implemented a sixth round of measures in February, such as higher stamp duties and home loan curbs on property transactions.
"Policy restrictions in some markets will continue to limit price growth for the rest of the year, particularly in Hong Kong and Singapore," said Dr Jane Murray, head of research for Asia Pacific at Jones Lang LaSalle.
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